Tags: Philadelphia | fed | Manufacturing

Philadelphia Fed: Manufacturing Shrinks at Faster Pace

Thursday, 21 Jun 2012 10:37 AM

Manufacturing in the Philadelphia region shrank in June at the fastest pace in almost a year, indicating the global economic slowdown is holding factories back.

The Federal Reserve Bank of Philadelphia’s general economic index fell to minus 16.6 in June, the lowest level since August, from minus 5.8 the previous month. Economists forecast the gauge would improve to zero, the dividing line between growth and contraction, according to the median estimate in a Bloomberg News survey. The report covers eastern Pennsylvania, southern New Jersey and Delaware.

Manufacturing may keep ebbing as consumer spending, business investment and exports cool, reflecting the slowdown in global growth caused, in part, by the European fiscal crisis. The Federal Open Market Committee announced Wednesday it would extend its efforts to keep long-term interest rates low in an effort to protect the expansion.

“It just reflects the sort of broader slowing we’re seeing,” Peter Newland, a New York-based U.S. economist for Barclays Plc, said before the report.

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