DATA: The Philadelphia Fed said on Thursday its regional index activity gauge fell to -12.3 in July from -3.3 the previous month.
Economists polled by The Wall Street Journal expected a reading of 1.6.
Any reading below zero indicates deteriorating manufacturing conditions. It was the second consecutive month of contraction.
Important details: The new orders barometer dropped notably by 12.4 points to minus 24.8 points in July. The Shipment Index rose 4 points to 14.8.
The price paid index fell 12 points to 52.2, the lowest level since January.
The business outlook index for the next six months fell 11.8 points to minus 18.6. The Futures Investment Index fell 7 points to 4.4, its lowest level since March 2013.
The big picture: The pandemic’s star U.S. production is suddenly in trouble. Economists fear layoffs and production cuts are looming.
The Philadelphia Fed Index is one of several regional manufacturing indicators that provide timely readings on manufacturing.
Last week, a similar Empire State survey from the New York Fed showed an improvement in manufacturing activity, with an index of business conditions rising 12.3 points to 11.1 in July.
The national ISM manufacturing index fell to 53% in June, the lowest since June 2020, and has been above the breakeven point of 50 for 25 consecutive months. July data will be released early next month.
Market reaction: The Dow, +0.15% SPX, +0.59% stocks are expected to open lower on Thursday after several days of strong gains.