By Michael S. Derby
NEW YORK (Reuters) - Factory activity in the Federal Reserve Bank of Philadelphia's district contracted again in October, the bank said in a report Thursday.
The bank's index for general activity stood at -8.7 for last month, a modest improvement from September's -9.9 reading. Economists had expected a better performance, however, at a forecasted reading of -5.
The bank said the negative reading was the fourth such performance over the last five months and noted "nearly 24 percent of the firms reported decreases in general activity this month, while 15 percent reported increases," while a small majority of firms held steady last month.
The report found local factory operators reporting higher employment and inflationary pressures, and that they also see activity falling over the next half year.
The Philadelphia Fed said more respondents to the survey expect to increase capital spending over the next six months rather than cut them, but noted "the share of firms expecting to decrease spending exceeded the share of firms expecting to increase spending in four out of six categories."