Manufacturing in the Philadelphia region contracted in August for a fourth consecutive month as orders and employment declined.
The Federal Reserve Bank of Philadelphiaâ€™s general economic index improved to minus 7.1 in August from minus 12.9 the previous month. Economists forecast the gauge would climb to minus 5, according to the median estimate in a Bloomberg survey. A reading of zero is the dividing point between contraction and expansion in the area covering eastern Pennsylvania, southern New Jersey and Delaware.
Todayâ€™s report is in line with figures from The Federal Reserve Bank of New York earlier this week that showed manufacturing contracting for the first time in 10 months. Slowing demand from Europe to China and cutbacks in business investment in new equipment may be hurting U.S. factories even as American household spending holds up.
â€œThe pace of growth is still unimpressive overall,â€ said Sean Incremona, senior economist at 4Cast Inc. in New York before the report. â€œExternally there are some headwinds with pretty soft global conditions. We think that business investments are pretty tame in 2012 so that is restricting manufacturing from a domestic standpoint as well.â€
Estimates in the Bloomberg survey from 56 economists surveyed ranged from minus 17.9 to 5.
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