Philadelphia Manufacturing Drops to Lowest Level Since 1990 in Fed Index

[Purveyor]

Source: Bloomberg

By Timothy R. Homan

Feb. 19 (Bloomberg) -- Manufacturing in the Philadelphia region shrank in February at the fastest pace in more than 18 years as employment and sales plunged to record lows.

The Federal Reserve Bank of Philadelphia’s general economic index dropped to minus 41.3 this month, lower than forecast, compared with minus 24.3 in January, the bank said today. Negative numbers signal contraction.

The global economic slowdown is causing U.S. manufacturers to scale back production and cut payrolls. President Barack Obama this week signed into law a two-year, $787 billion stimulus plan aimed at saving or creating 3.5 million jobs as another report today showed a record 4.99 million people were collecting jobless benefits.

“The economy is still contracting at a substantial pace,” Lewis Alexander, chief economist at Citigroup Inc. in New York, said in an interview with Bloomberg Television. “We are still in the midst of a very substantial correction.”

Economists forecast the index would fall to minus 25, according to the median of 53 projections in a Bloomberg News survey. Estimates ranged from minus 20 to minus 34.

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