Philly Fed factory slump eases sharply in June

NEW YORK, June 18 (Reuters) - Manufacturing in the U.S. Mid-Atlantic area contracted in June for the ninth consecutive month but much less severely than expected and far less than in the previous month, a regional Federal Reserve survey released on Thursday showed.

The Philadelphia Federal Reserve Bank said its business activity index rose sharply to minus 2.2 in June from minus 22.6 in May. That was the highest reading since September 2008, the report said.

That was well above economists' expectations of minus 17, based on the median of forecasts among economists polled by Reuters. The 53 forecasts in the poll ranged from minus 24 to minus 6.

A reading below zero indicates contraction in the region's manufacturing sector.

The manufacturing survey also showed the outlook for business conditions at its highest level since September 2003.

The survey covers factories in a region encompassing eastern Pennsylvania, southern New Jersey and Delaware and is looked at closely as one of the first indicators of the health of the U.S. manufacturing sector. (Reporting by Burton Frierson; Editing by Padraic Cassidy)