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Economic Report: Philly Fed factory activity slips but remains elevated, while prices rise further

The numbers: The Philadelphia Federal Reserve’s business activity index edged lower to a still robust 30.7 in June from 31.5 in the prior month, the regional Fed bank said Thursday.

Economists polled by the Wall Street Journal expected a 30.5 reading. Any reading above zero indicates expansion in the manufacturing sector.

What happened: The gauge of new orders fell 10 points to 22.2 from last month, while the shipments index rose 6 points to 27.2.

Unfilled orders fell to 22.5 from 40.4 in May.

The reading of the six-month business outlook rose to 69.2 from May’s reading of 52.7

The index of the number of employees rose to 30.7 from 19.3 last month, the regional bank said.

The prices-paid index jumped to 80.7 from May’s reading of 76.8 , while the prices-received index added 8.7 points to 49.7 in June

Big Picture: Though the headline number decreased slightly in June, the survey showed that manufacturing activity in the region remains elevated, and that manufacturers continue to add jobs to the economy.

Price pressures continue to increase, as prices paid and received beat last month’s reading, with the prices-received index hitting the highest level since March 1980 and the prices-received index notching its highest reading since 1981.

Market reaction: Stock index futures
DJIA,
-0.49%

SPX,
-0.11%

were headed lower before the start of trade Thursday after the Fed penciled in two rate hikes for 2023.

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