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Philadelphia Fed’s factory gauge slumps deeper into contraction in April

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The numbers: The Philadelphia Fed said Thursday its gauge of regional business activity slumped to negative 31.3 in April from negative 23.2 in the prior month. Any reading below zero indicates deteriorating conditions. This is the eight straight reading below zero and the tenth in the last eleven months. 

Economists polled by the Wall Street Journal expected a slight improvement to negative 20 reading in April.

Key details: The barometer on new orders improved 5.5 points but remained at negative 22.7 in April. The shipments index rose a sharp 18.1 points to a negative 7.3 reading.  The measure on six-month business outlook rose to negative 1.5 from negative 8 in March.

Big picture: Manufacturing is struggling. The Fed’s Beige Book reported Wednesday that the factory sector was flat or down across the country.

A similar measure of factory activity in New York improved for the first time since November. The Empire State index jumped 35 points to 10.8 in April. 

Josh Shapiro, chief U.S. economist at MFR Inc. said the Philadelphia Fed index is viewed as a leading indicator of the national ISM manufacturing index that will be released on May 1. The ISM factory index contracted for the fifth straight month in March.

“Manufacturing continues to face hurdles from softer demand for goods and higher borrowing costs,” said Rubeela Farooqi, chief U.S. economist at High Frequency Economics, ahead of the report.

Market reaction: Stocks
DJIA,
-0.23%

SPX,
-0.01%

were set to open lower on Thursday. The yield on the 10-year Treasury note
TMUBMUSD30Y,
3.753%

fell to 3.55%.

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Jacob Keiter is a husband, a writer, a journalist, a musician, and a business owner. His journey to becoming a writer was one that was paved with challenges, but ultimately led him to find his true calling. Jacob's early years were marked by a strong desire for creative expression. He was always drawn to music, and in his youth, he played in several bands, chasing the elusive promise of fame and success. However, despite his best efforts, Jacob struggled to find the recognition he craved. It wasn't until he hit a low point in his life that Jacob discovered his love for writing. He turned to writing as a form of therapy during a particularly difficult time, and found that it not only helped him to cope with his struggles, but also allowed him to express himself in a way that he had never been able to before. Jacob's writing skills quickly caught the attention of others, and he soon found himself working as a journalist for The Sun out of Hummelstown. From there, he went on to contribute to a variety of publications, including the American Bee Journal and Referee Magazine. Jacob's writing style is reflective of traditional journalism, but he also infuses his work with a unique voice that sets him apart from others in his field. Despite his success as a writer, Jacob also owns another business, JJ Auto & Home, which specializes in cleaning. Jacob's commitment to excellence is evident in all of his endeavors, whether it be in his writing or in his business ventures. Today, Jacob is the author of two books and continues to inspire others through his writing. His journey to becoming a writer serves as a reminder that sometimes our darkest moments can lead us to our greatest achievements.

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