Manufacturing gauge declines sharply to -0.4, missing forecasts and signaling contraction after April’s expansion.
The Philadelphia Fed Manufacturing Index slumped to -0.4 in May, a sharp reversal from April’s 26.7 reading and well below the 17.6 consensus estimate. The drop marks the first negative print since January, indicating contraction in regional factory activity.
April’s index had reflected robust growth, with business conditions and capital expenditure metrics also showing strength. However, May’s data revealed a decline in both measures, with business conditions easing to 53.2 from 40.8 and capex dipping to 30.9 from 35.2.
The unexpected weakness may raise concerns about broader economic momentum as manufacturing sentiment softens.