Philly Manufacturing Gauge Shows Persistent Weakness In June, But Shipment Index Registers First Positive Reading Since March

The report, also known as the Philly Fed Survey, pointed to weakness in manufacturing activity over the past month; its monthly manufacturing index remained flat at -4 in June, unchanged from May.

The Federal Reserve Bank of Philadelphia’s gauge measuring manufacturing activity in the U.S. Mid-Atlantic region remained unchanged in June, with the report underscoring weakness across indicators and a decrease in employment during the month.

The report, also known as the Philly Fed Survey, pointed to weakness in manufacturing activity over the past month. Its monthly manufacturing index remained flat at -4 in June, unchanged from May.

The survey’s future indicators suggest less widespread expectations for growth over the next six months.

The report's new orders index fell five points to 2.3 in June, while the shipments index rose 21 points to 8.3, its first positive reading since March.

Meanwhile, benchmark indices were hovering in the green at the time of writing amid sustained geopolitical tensions as President Donald Trump weighs an attack on Iran amid an ongoing conflict with Israel.

At the time of writing, the SPDR S&P 500 ETF (SPY), which tracks the S&P 500 index, was up 0.26%, while the Invesco QQQ Trust (QQQ) gained 0.29%. Stocktwits data shows retail sentiment around the S&P 500 ETF has remained in the ‘bearish’ territory over the past week.

The report highlighted that 41% of the surveyed firms indicated an increase in input prices, and none reported a decrease, while 58% of the firms reported no change.

The Philly Fed Survey covers the Pennsylvania, New Jersey, and Delaware regions. When above zero, it indicates growth in factory activity, and when below zero, it points to a contraction. 

The report has shown drastic changes in manufacturing activity over the past two months, with a contraction in both April and May. 

This comes at a time when the Federal Reserve has continued to maintain a cautious stance on inflation. The central bank’s Federal Open Market Committee kept the key borrowing rates unchanged in the 4.25% to 4.5% range, while keeping its inflation projections elevated at 3% for 2025.

“Uncertainty about the economic outlook has diminished but remains elevated. The Committee is attentive to the risks to both sides of its dual mandate,” it said.

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