PhillyFed

ResponsestotheBusinessOutlookSurveythismonthsuggestthatregionalmanufacturingactivityhasdippedsignificantly。

Thesurvey’sbroadindicatorsforactivity,shipments,andnewordersalldeclinedsharplyfromlastmonth。

Firmsindicatedthatemploymentandaverageworkhoursarelowerthismonth。

Priceindexescontinuedtoshowatrendofmoderatingpricepressures。

Thebroadestindicatoroffutureactivityalsoweakenedmarkedly,butfirmsstillexpectoverallgrowthinshipments,neworders,andemploymentoverthenextsixmonths。

Thecollectionperiodforthismonth’ssurveyranfromAugust8-16,overlappingaweekofunusuallyhighvolatilityinbothdomesticandinternationalfinancialmarkets。

Thesurvey’sbroadestmeasureofmanufacturingconditions,thediffusionindexofcurrentactivity,decreasedfromaslightlypositivereadingof3。

2inJulyto-30。

7inAugust。

TheindexisnowatitslowestlevelsinceMarch2009(seeChart)。

Thedemandformanufacturedgoods,asmeasuredbythecurrentnewordersindex,paralleledthedeclineinthegeneralactivityindex,falling27points。

Thecurrentshipmentsindexfell18pointsandrecordeditsfirstnegativereadingsinceSeptemberoflastyear。

Suggestingweakeningactivity,indexesforinventories,unfilledorders,anddeliverytimeswereallinnegativeterritorythismonth。

Firms’responsessuggestadeteriorationinthelabormarketcomparedwithJuly。

Thecurrentemploymentindexfell14points,recordingitsfirstnegativereadingin12months。

About18percentofthefirmsreportedanincreaseinemployment,but23percentreportedadecrease。

Thepercentageoffirmsreportingashorterworkweek(28percent)wasgreaterthanthepercentagereportingalongerone(14percent)。

Theworkweekindexfell9points。

NationalAssociationofRealtors

Existing-homesalesdeclinedinJulyfromanupwardlyrevisedJunepacebutarenotablyhigherthanayearago,accordingtotheNationalAssociationofRealtors?

MonthlygainsintheNortheastandMidwestwereoffsetbydeclinesintheWestandSouth。

Totalexisting-homesales1,whicharecompletedtransactionsthatincludesingle-family,townhomes,condominiumsandco-ops,fell3。

5percenttoaseasonallyadjustedannualrateof4。

67millioninJulyfrom4。

84millioninJune,butare21。

0percentabovethe3。

86millionunitpaceinJuly2010,whichwasacyclicallowimmediatelyfollowingtheexpirationofthehomebuyertaxcredit。

BureauofLaborStatistics

TheConsumerPriceIndexforAllUrbanConsumers(CPI-U)increased0。

5percentinJulyonaseasonallyadjustedbasis,theU。

S。

BureauofLaborStatisticsreportedtoday。

Overthelast12months,theallitemsindexincreased3。

6percentbeforeseasonaladjustment。

ThegasolineindexreboundedfrompreviousdeclinesandrosesharplyinJuly,accountingforabouthalfoftheseasonallyadjustedincreaseintheallitemsindex。

ThefoodathomeindexacceleratedinJulyandalsocontributedtotheincrease,asdairyandfruitindexespostednotableincreasesandfiveofthesixmajorgrocerystorefoodgroupsrose。

Theindexforallitemslessfoodandenergyincreasedaswell,thoughthe0。

2percentincreasewasslightlysmallerthanthetwopreviousmonths。

TheshelterindexacceleratedinJuly,andtheapparelindexagainincreasedsharply。

Incontrast,theindexfornewvehicleswasunchangedafteralongstringofincreases。

TheindexforhouseholdfurnishingsandoperationswasflatinJulyaswell,andtherecreationindexdeclinedslightly。

The12monthchangeintheallitemsindexremainedat3。

6percentforthethirdmonthinarow。

Thechangeintheindexforallitemslessfoodandenergycontinueditsupwardtrend,risingto1。

8percentinJuly,withtheshelterandapparelindexescontributingnotablytotheacceleration。

Theenergyindexhasrisen19。

0percentoverthepastyear。

Reuters

WilliamDudley,thepresidentoftheFedsNewYorkbranch,saidthecentralbankwasalwaysscrutinizingbanksandthatittreatedU。

S。

andEuropeanbanksexactlythesame。

DudleywasrespondingtothestoryintheJournal。

Thisisstandardoperatingprocedure,thisissomethingthatwedoasamatterofcourse,DudleytoldNewJerseybusinessleadersThursday。

ItsreallyimportanttostressthatwerenotfocusingonforeignbanksanymorethanwerefocusingonU。

S。

banks。

WetreatforeignbanksandU。

S。

banksexactlythesame。

The$2。

5trillionU。

S。

moneymarketfundsindustrywhichsuppliesshort-termdollarfundingtobankshasretreatedfromtheeurozoneinrecentmonths,concernedthatthecontinentsdebtcrisisisspiralingoutofcontrol。

Thatandthedryingupofinterbanklendinghasledtoatreblingofdollarfundingcostsforeurozonebanksinthelastmonth。

OnebankwasforcedtoborrowdollarsattheEuropeanCentralBankWednesday。

Inadramaticshift,theU。

S。

branchesofforeignbanksbecamenetborrowersofdollarsfromtheiroverseasaffiliatesforthefirsttimeinadecade,FederalReservedatareleasedlastweekshowed。

OnepersonataEuropeanbanksaidthatthecrisishadheightenedscrutinyontheU。

S。

operationsofEuropesbanks,althoughthiswasatypicalresponsebylocalregulators。

U。

S。

regulatorswereconcernedaboutover-relianceonshort-termwholesalefundinggivenhowquicklythatcandryup,thepersonsaid,andworriedthatfundscouldflowbacktotheparentgroupfromoverseasbranchesquicklyinacrisis。

Wednesday,oneeurozonebankborrowed$500millionfromtheEuropeanCentralBankataratemuchabovethoseatwhichbankscangetdollarsintheopenmarket。