Economic Report: Philly Fed manufacturing index sees big plunge in March

The numbers:The Philadelphia Fed manufacturing index in March plunged to -12.7 after registering 36.7 in the previous month. That’s the lowest reading since June 2012.

Any reading below zero indicates worsening conditions. Economists polled by MarketWatch had expected a 8 reading.

THe Philly Fed index since 2012

What happened: The headline index is based on a single stand along question about business conditions unlike the manufacturing index which is a composite based on components

In March, the components moved in a similar direction, with the new-orders index falling to – 15.5 from 33.6. The shipments index fell 25 points to 0.2.

The big picture: A similar survey conducted by the New York Fed saw sentiment saw a record decline to -21.5 in March. Economists think the manufacturing sector will be hit hard by the coronavirus shutdown of economic activity.

What are they saying? “Business conditions in the Philly Fed district look abysmal. It is safe to say that any hope of a manufacturing recovery in 2020 is completely extinguished,” said Oren Klachkin, lead U.S. economist at Oxford Economics.

Market reaction: U.S. equity benchmarks were lower Thursday. The Dow Jones Industrial Average DJIA, +0.47% was down 575 points or 3% in early morning trading.