Philly Fed index shows slowing factory orders

Workers in an auto manufacturing plant in Michigan
CBS News

(AP) WASHINGTON - Manufacturing in the Philadelphia region contracted for the third straight month in July, a pessimistic sign that the economy has weakened. But some analysts say the report might only reflect a regional slowdown.

The Federal Reserve Bank of Philadelphia says its index of regional manufacturing activity rose to -12.9, up from -16.6 in June. Any reading below zero indicates contraction.

"Firms in the region's manufacturing sector are continuing to experience declines in overall activity," the Philly Fed said in a report. "More firms reported declines in new orders, shipments, and employment than reported increases. Prices, on balance, were near steady this month."

Hiring 'tepid' in most U.S. regions
Jobless claims surge to 386,000
Bernanke, Congress appeal to one another to fix economy

Although the economic outlook among reporting employers was less optimistic this month than in June, companies continue to believe that activity will rebound in the second half of the year, the bank noted.

Some parts of the report improved. New orders and shipments rose, though both remained in negative territory. But an index measuring employment dropped sharply from 1.8 to -8.4.

The report differs from a New York Fed survey, released Monday, that said factories were expanding in that region. And the Fed's Beige Book, a national survey released Wednesday, said manufacturing improved in 10 of the central bank's 12 regions.