By Geoffrey Smith
Investing.com -- A key gauge of U.S. manufacturing activity improved in January, but another reading implying a fall in activity did little to calm fears of a looming recession that swept across financial markets on Wednesday.
The Philadelphia Federal Reserve's manufacturing index rose modestly for a second straight month, to -8.9 from an upwardly revised level of -13.7 in December. While the index level is still low by historical standards, it contrasts starkly with a plunge in the analogous index published earlier in the week by the New York Fed.
The Philly Fed index is generally considered the more accurate reflection of manufacturing trends nationwide.
"The indicators for current activity and new orders improved from their December readings but remained negative," the authors said in a summary, adding that the survey suggested firms have only "tempered expectations for growth over the next six months."
Further evidence of the slowdown across the economy came on Thursday in the shape of housing starts and building permits data for December, both of which fell to their lowest levels since the middle of 2020.
The labor market, however, remained a bright spot, with initial jobless claims falling to a new nine-month low of 190,000, defying expectations for an uptick. The numbers reinforced impressions that the ever-larger numbers of people being laid off around the country are still not struggling to find new jobs and that the slowdown may currently not be as severe as would otherwise be the case.