Philadelphia Fed manufacturing index drops sharply

AP News
Posted: Jun 16, 2011 10:31 AM
Philadelphia Fed manufacturing index drops sharply

A gauge of manufacturing activity in the Philadelphia region fell in June for the first time in nine months and to the lowest level in nearly two years. The decline offered the latest evidence that gas prices slowed the economy this spring.

The Federal Reserve Bank of Philadelphia says its regional index of manufacturing conditions dropped to -7.7 in June, down from 3.9 in May. It was the first negative reading since last September and the lowest reading for the index since July 2009.

The index tracks manufacturing conditions in the region covered by the Philadelphia Fed. That includes eastern Pennsylvania, southern New Jersey and Delaware.

High gas prices have trimmed consumer spending, cutting demand for factory goods. Consumer spending accounts for 70 percent economic activity.