The numbers: The Philadelphia Fed said Thursday its gauge of regional business activity fell to negative 10.5 in December from negative 5.9 in the prior month. Any reading below zero indicates deteriorating conditions.Â
Economists polled by the Wall Street Journal expected a negative 4 reading in December.Â
This is the 17th negative reading in the past 19 months.
Key details:
The barometer on new orders dropped sharply to negative 25.6 in December after a slightly positive reading of 1.3 in the prior month.
The shipments index remained in contraction territory at negative 10.8.
The measure on six-month business outlook rose to 12.1 from a negative reading of 2.1 in November. This is the highest reading since July.
Big picture: The Philadelphia Fed index is one of the first regional manufacturing gauges that offer timely reads of the manufacturing sector.
The Empire State Index, a similar measure of factory activity in New York State, fell to negative 14.5 in December from positive 9.1 in the prior month.
Taken together, the data suggests further weakness in manufacturing.
The national ISM factory index has been in contraction for thirteen straight months. The December data will come early next year.
Economists say capital spending could pickup if long-term bond yields remain as low as they have been for the past month.
Market reaction: Stocks
DJIA
SPX
were set to open higher on Thursday while the 10-year Treasury yield
BX:TMUBMUSD10Y
was down to 3.84% in early morning trading.
This story originally appeared on Marketwatch
