WASHINGTON (AP) - The Philadelphia Federal Reserve's June manufacturing index is expected to show evidence of a recovery in the U.S. industrial sector.
The Philly Fed is forecast to report Thursday its manufacturing index stood at 6.3 in June, up from 4.2 in May, according to a consensus estimate of Wall Street economists surveyed by Thomson/IFR. The data are scheduled to be released at noon EDT.
A figure above zero indicates regional manufacturing is growing, while a number below zero indicates decline.
The regional survey covers eastern Pennsylvania, southern New Jersey and Delaware.
The New York Fed reported Friday that regional manufacturing activity ''improved significantly'' in June, with the index of manufacturing activity jumping 18 points, to 25.8, after three months of anemic results.
A similar report from the Philadelphia Fed ''would be encouraging confirmation of improved conditions in manufacturing,'' said David Resler, chief economist at Nomura Securities, in a research note.
The Philadelphia Fed's index showed improvement in May, increasing to 4.2 from 0.2 in April, its highest reading since January. New orders and current shipments also rose.
Investors will also watch for any signs of higher inflation, which could make it more likely that the Federal Reserve will raise interest rates later this year. In May, the Philly Fed reported that prices paid by manufacturers for raw materials increased for the fourth consecutive month.
In addition, the regional Fed's employment index jumped 10 points to 12.9 last month. Increased employment can generate upward pressure on wages, which can spur inflation.