Philly Fed’s factory index in August freefall (Greg Robb)

Created by : Francis Goodwin View profile

Regional gauge falls to negative 30.7, stunning markets

Aug. 18, 2011 -- WASHINGTON (MarketWatch) -- Factory activity in the Philadelphia region weakened sharply in August to the lowest level seen in more than two years, the Federal Reserve Bank of Philadelphia said Thursday, adding to fears that the economy has ground to a halt.

The Philly Fed’s business outlook survey fell to negative 30.7 in August from 3.2 in July. This is the lowest reading since March 2009.

Readings below zero indicate contraction in the region’s factories.

The size of the decline in the index stunned analysts -- economists had expected a reading of 0.5 in August, according to a survey conducted by MarketWatch -- and added fuel to Thursday’s rout in the stock market.