A gauge of factory activity in the U.S. Mid-Atlantic region unexpectedly accelerated in August to the briskest pace since April and firms reported input price pressures eased to the lowest since late 2020.
The Philadelphia Federal Reserve's monthly manufacturing index rose to 6.2 this month from negative 12.3 in July, topping all 30 estimates in a poll of Reuters economists, which had a median prediction for a reading of minus 5.0.
While improved from July's reading, which had been the lowest since May 2020, the rebound indicated only modest growth in the current pace of output and new orders declined for a third straight month. Moreover, firms on balance remained pessimistic about the near-term outlook.
"The survey's future indexes rose slightly but continue to suggest that the firms expect overall declines six months from now," the report said. The 6-month forward index ticked up to negative 10.6 from negative 18.6 in July.
Meanwhile, the report's inflation component showed further signs of relief from the extreme input price pressures manufacturers' have been battling for more than a year. Earlier this year the survey's prices paid index had hit its highest level since 1979, but the August report showed it tumbling for a fourth straight month to the lowest since December 2020.
Now at 43.6, the prices paid index is down by nearly 50% from April's high but remains roughly twice the level that had prevailed throughout 2019, the year before the COVID-19 pandemic began.
