The numbers: The Philadelphia Fed said Thursday its gauge of regional business activity inched up to negative 8.7 in October from negative 9.9 in the prior month. Any reading below zero indicates deteriorating conditions.
Economists polled by the Wall Street Journal expected a negative 0.5 reading.
Key details: The headline index is based on a single stand-alone question about business conditions unlike the national ISM manufacturing sector index which is a composite based on components
The barometer on new orders ticked up 2 points to negative 15.9. The shipments index was essentially unchanged at 8.6, its lowest reading since May 2020. The measure on six-month business outlook fell sharply to negative 14.9 from negative 3.9.
Big picture: Manufacturing is struggling with declining orders, thinning order backlogs and right sizing of customer inventories, according to Richard Moody, chief economist at Regions Financial Corp.
A similar survey from New York – the Empire State Index – fell 7.6 points to negative 9.1 in October.
These two regional surveys give economists an advance sense of trends ahead of the national ISM manufacturing activity index that will be released early next month. The ISM factory index fell to 50.9 in September, the lowest level since the spring of 2020.
Market reaction: Stocks
were set to open higher on Thursday while the yield on the 10-year Treasury note
rose to 4.15%.