Bloomberg (09/20/12) Shobhana Chandra
The Federal Reserve Bank of Philadelphia reported on Sept. 20 that manufacturing in the Philadelphia region shrank for a fifth straight month in September, reinforcing signs the industry will offer less support to the U.S. economy. The bank’s general economic index improved to -1.9, higher than forecast, from -7.1 in August. Readings less than zero signal contraction in the area covering eastern Pennsylvania, southern New Jersey, and Delaware. The median forecast of 62 economists surveyed by Bloomberg was -4.5.
The figures, which showed a slump in sales and cutbacks in employment, add to concerns that a pillar of the expansion is faltering. Cooling exports due to the European debt crisis, combined with slower business investment and restrained household spending in the world’s largest economy, mean manufacturing may stay depressed. “The sector continues to struggle,” says Millan Mulraine, senior U.S. strategist for TD Securities. “There’s uncertainty both domestically and globally. We’re likely to see manufacturing moving sideways.”