Philadelphia Federal Reserve Index Rises In June
According to monthly data released last week by the Philadelphia Federal Reserve Bank, factory activity in the mid-Atlantic region, including Philadelphia, has been growing at a faster pace this month than anticipated. The Fed’s business activity index rose to 15.2 from 6.7 in May. This was the highest level for the index since December, and almost twice what Reuters-surveyed analysts expected. The AP notes that despite the large boost from May to June, June’s results are lower than the recent height of 40.2, reported in November. At the same time, prices for production are rising. This latest data saw 21% of area factories report increased production input costs for June compared with just 5% of factories reporting higher costs in May. The prices paid index climbed to 30, its highest level in eight months. Still, this is the latest indication that the region’s economy is improving, boosting factory production.
Nationwide, the AP reports that order to US factories “for long-lasting manufactured goods” declined by 1.8% in May, more than the 1.5% decline seen in April. May’s total durable goods decline was seen largely due to a 35.3% dip in aircraft orders. The AP notes US “factories have struggled this year in part because a strong dollar has made U.S. goods more expensive overseas.”
What This Means For Small Businesses
News that Philadelphia’s factories are boosting their activity is an encouraging sign for area small business owners, as it comes as an indication that the area’s economy is improving. However, rising production costs suggest that these economic improvements aren’t occurring without also creating some challenges for business owners.
Additional Reading
FOXBusiness also covered the Philadelphia Fed’s factory activity report.
Note: this article is intended to keep small business owners up on the latest news. It does not necessarily represent the policy stances of NFIB.
