The numbers: The Philadelphia Federal Reserve said Thursday its gauge of regional business activity plunged to negative 24.3 in February from negative 8.9 in the prior month. This is the lowest level since the worst of the COVID pandemic in May 2020.
Any reading below zero indicates deteriorating conditions. This is the sixth straight negative reading and the eight in the last nine months.
Economists polled by the Wall Street Journal expected a negative 7.8 reading in February.
Key details: The measure of new orders fell to negative 13.6 in February from negative 10.9 in the prior month
The shipments index fell to 8.7 from 11.1 in January.
The employment index declined but stayed positive. The price indexes continued to point to increases.
Big picture: The weak reading clearly shows that the factory sector is in contraction territory.
The Philly Fed index and the separate Empire State index from New York are seen as early gauges of the health of the manufacturing sector every month.
Earlier this week, the Empire State index rose 27.1 points but was still a negative 5.8 reading.
The national reading of February manufacturing activity, produced by the Institute for Supply Management, will be released early next month. In January, the ISM factory index slipped to 47.4, below the 50 growth threshold for the third straight month
Market reaction: Stocks
were set to open lower on Thursday after a slew of economic reports, including a hot reading for wholesale inflation. The yield on the 10-year Treasury note
rose to 3.81%.