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THE BIZNOB – Global Business & Financial News – A Business Journal – Focus On Business Leaders, Technology – Enterpeneurship – Finance – Economy – Politics & LifestyleTHE BIZNOB – Global Business & Financial News – A Business Journal – Focus On Business Leaders, Technology – Enterpeneurship – Finance – Economy – Politics & Lifestyle

Breaking News

Breaking News

Unpredictable drop in Philadelphia Federal Reserve factory index

Photo Credit: Hannah Yoon Photo Credit: Hannah Yoon
Photo Credit: Hannah Yoon Photo Credit: Hannah Yoon

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In February, manufacturing activity in the Mid-Atlantic region dropped unexpectedly.

Thereafter, goods producers reported input price hikes accelerated for the first time in 10 months. While their own price increases slowed remarkably. Thus indicating margin pressures were mounting.

The Philadelphia Federal Reserve’s monthly manufacturing index dropped to -24.3 from -8.9 in January. Thus, defying economists’ expectations for a third consecutive monthly improvement.

The indices that track new orders, shipments, delivery times, and employee count all decreased.

In the meantime, the survey’s measures of prices, those paid by producers and those charged to consumers – both closely monitored inflation indicators.

Reveals that margins were narrowing. The prices paid index inched up to 26.5 from 24.5, the first increase since April 2022.

While the prices received index dropped by 50% to 14.9, the lowest level since February 2021.

In addition, firms anticipate smaller consumer price increases over the next 12 months than they did in November.

In response to a special question, businesses indicated that they anticipate levying 4.5% price increases on their own products in the coming year.

This is a decrease from 4.8% when asked the same question in November.

It is also a decrease from the 7.0% price increases realized over the past year.

Some Federal Reserve officials have been searching for a reversal in the trend of margins. This is further evidence that the high inflation they have been combating for the past year may continue to decline.

The Federal Reserve raised its benchmark interest rate by a quarter percentage point to a range between 4.50% and 4.75% earlier this month.

It Indicated that additional increases were warranted as inflation remained too far above its annual target of 2%.

For U.S. consumers as a whole, producers estimated prices would rise 4.0% over the next 12 months, down from 5.0% in November.

Likewise, their expectations for longer-term consumer inflation over a 10-year horizon decreased to 3.0% from 4.0%.

In addition, wage increases should decrease to 4.8% from 5.0% in the November survey, as anticipated.


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