A survey released Thursday showed that factory operators reported a brighter outlook and said inflation pressures were easing notably, despite the fact that manufacturing activity in the U.S. mid-Atlantic region contracted for a fourth month in December.
The Philadelphia Federal Reserve's manufacturing activity index rose to negative 13.8 from negative 19.4 in November. Economists polled by Reuters had predicted a reading of negative 10.
New orders fell to the lowest since the early days of the coronaviruses epidemic in April 2020, and firms said employment shrank.
The survey's price of goods fell to a 27 month low and was below the series historical average for the first time since September 2020, the latest signal that inflation has begun to recede from the 40 year highs earlier this year.
The manufacturers reported a positive outlook for the first time since May. The outlook for new orders, shipments and factory employment has improved.