Manufacturing in the Philadelphia region expanded at a slower pace this month, a reminder that the recovery from the deepest recession since the 1930s will be gradual.
The Federal Reserve Bank of Philadelphia’s general economic index dropped to 11.5, lower than forecast, from a September reading of 14.1 that was the highest since June 2007, figures from the bank showed today.
Factories have been slow to rev up output as excess capacity, mounting joblessness and the wind-down of stimulus measures such as “cash-for-clunkers” point to an uneven rebound in demand. Even so, inventories near record-low levels set the stage for an eventual pickup in production when consumer spending strengthens.
Manufacturers were less upbeat about the future, today’s report showed. Expectations for the next six months fell to 39.8 from 47.8. Factory activity nationwide accounts for about 12 percent of the U.S. economy, the world’s largest.
Source: Philly Fed