Manufacturing activity appears to be slowing following the election.
The Philadelphia Fed said Thursday its index of business activity showed a decline in November, slipping to 26.3 from 32.3 in October.
The lower figure is still above the historical average and any reading above zero indicates growth. Economists had forecast an even bigger decline after the index hit its highest reading in 50 years last month.
The share of firms reporting an increase in new orders fell to 49 percent from 55 percent in October. Only 41 percent of the firms reported higher shipments, compared with 57 percent last month.
On balance, the firms reported increases in manufacturing employment for the fifth consecutive month. Employment increases were reported by 34 percent of the firms, up from 23 percent last month, while 7 percent reported decreases.
A survey released Monday by the New York Fed saw even more weakening in November. The Kansas City Fed’s survey likewise showed softness.
Alongside housing, manufacturing has been a bright spot in the pandemic recovery. The fear is that the resurgent virus as well as a less business-friendly political environment could sap the strength of U.S. factories. American manufacturers may also find themselves under renewed pressure from China if Joe Biden becomes president and eases the U.S. government’s trade stance.