FX.co ★ Philly Fed Index Edges Lower But Remains Positive In March

On Thursday, the Federal Reserve Bank of Philadelphia published a report revealing a slight deceleration in regional manufacturing growth for March. The bank's diffusion index, which measures current general activity, slipped slightly to 3.2 in March, down from 5.2 in February, but still indicating growth. Experts had predicted a drop to -2.3.

The slight reduction in the overall index occurred in spite of a rebound in new orders, with the new orders index posting a positive 5.4 in March, up from -5.2 in February. Similarly, the shipments index also increased slightly, accelerating the pace of growth to 11.4 in March, up from 10.7 the previous month.

Unfortunately, the employment index showed a slight increase in job decreases, going from -10.3 in February to -9.6 in March, indicating an overall decline in employment levels.

In terms of inflation, the prices paid index plunged to 3.7 in March from 16.6 in February. Meanwhile, the prices received index decreased slightly to 4.6 from 6.2 in the previous month.

The Philly Fed concluded that future activity indicators had climbed, signaling broader expectations of overall growth in the coming six months. In fact, the future general activity index soared to its highest level since July 2021, at 38.6 in March, up from just 7.2 in February.

Last Friday, in a separate report, the New York Fed revealed a significantly accelerated contraction in regional manufacturing activity for March. It indicated a fall to -20.9 in March from -2.4 in February in its general business conditions index. Experts had projected a decrease to -7.0.

In looking ahead, the New York Fed said firms expect conditions to get better in the forthcoming months, though optimism is somewhat muted. The index for future business conditions inched up slightly to 21.6 in March from 21.5 in February.