A report released by the Federal Reserve Bank of Philadelphia on Thursday said regional manufacturing softened overall in the month of August.
The Philly Fed said its diffusion index for current general activity plunged to a negative 7.0 in August from a positive 13.9 in July, with a negative reading indicating contraction. Economists had expected the index to decrease to a positive 7.0.
The steep drop by the headline index came as the new orders index slumped to 14.6 in August from 20.7 in July, while the shipments index plummeted to 8.5 in August from 27.8 in July.
The number of employees index also dove to a negative 5.7 in August from a positive 15.2 in July, suggesting a decline in employment.
The report also said the prices paid index climbed to 24.0 in August from 19.8 in July, while the prices received index tumbled to 13.7 in August from 24.2 in July.
Looking ahead, the Philly Fed said firms continue to expect growth over the next six months, but expectations were less widespread this month.
The diffusion index for future general activity plunged to 15.4 in August after surging to a three-year high of 38.7 in July.
A separate report released by the New York Fed on Thursday said New York manufacturing activity edged slightly lower in the month of August.
The New York Fed said its general business conditions index rose to a negative 4.7 in August from a negative 6.6 in July, but a negative reading still indicates contraction. Economists had expected the index to inch up to a negative 6.0.