Factory activity in the U.S. mid-Atlantic region shrank in August for the fourth month in a row, though the pace of contraction eased as new orders improved modestly, a survey showed on Thursday.
The Philadelphia Federal Reserve Bank said its business activity index rose to minus 7.1 from minus 12.9 in July, shy of economists' expectations for minus 5.
Forward-looking new orders edged up to minus 5.5 from minus 6.9.
Any reading below zero indicates contraction in the region's manufacturing. The survey covers factories in eastern Pennsylvania, southern New Jersey and Delaware.
It is seen as one of the first monthly indicators of the health of U.S. manufacturing leading up to the national report by the Institute for Supply Management.
That more comprehensive report showed the sector contracted in June and July as manufacturing has been hurt by economic uncertainty both domestically and abroad.
"The weakness in manufacturing reflects a weaker global economic picture," said Vassili Serebriakov, currency strategist at Wells Fargo in New York.
The Philadelphia survey's employment components were mixed, with the gauge of the number of employees slipping to its lowest level since September 2009 at minus 8.6, edging down from last month's minus 8.4. The average work week index gained to minus 14.6 from minus 17.3.
Survey respondents' view on the coming months cooled with the gauge of business conditions for the next six months falling to 12.5 from 19.3.
U.S. stocks were trading little changed shortly after the data, while Treasuries yields fell to session lows and the dollar pared losses against the euro.
Earlier in the week, a separate report showed manufacturing activity in New York state contracted for the first time in 10 months.
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