Philly Fed manufacturing index drops in September

The numbers: The Philadelphia Federal Reserve’s manufacturing index fell to 12.0 in September after registering a reading of 16.8 in August.

Any reading above zero indicates improving conditions. Economists polled by MarketWatch expected a reading of 10.0.

What happened: The indexes for general activity and new orders fell, while the indexes for shipments and employment increased, , but it was just a slight decline for the gauge for new orders, from 25.8 in August to 24.8 in September.

The survey’s future general activity index moderated but continues to suggest growth over the next six months.

The big picture: The manufacturing sector has been hurt by U.S.-China trade tensions, helping to drive the . That reading below 50% indicates a contraction in activity.

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Meanwhile, the for September, with any reading above zero indicating improving conditions.

What they’re saying: “The fact that the new orders measure has now posted six consecutive good results after weakening significantly in February and March is an encouraging sign, and suggests that the factory sector, while suffering from an inventory correction, weak demand abroad and the effects of tariffs, has not fallen off a cliff,” said Joshua Shapiro, chief U.S. economist at Maria Fiorini Ramirez, in a note.

Market reaction: U.S. stock futures pared their declines to trade near break-even levels immediately after the Philly Fed reading and reports on and the . S&P 500 futures  recently were up slightly at 3,014, while Dow Jones Industrial Average futures  edged higher at 27,187.

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