July 19, 2007 / 4:31 PM / 12 years ago

UPDATE 1-Philly Fed factory growth index slumps in July

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NEW YORK, July 19 (Reuters) - Factory activity in the U.S. Mid-Atlantic region grew much more slowly than expected in July while price pressures also eased, a survey showed on Thursday.

The Philadelphia Federal Reserve Bank said its business activity index slid to 9.2 in July from 18.0 in June. Economists polled by Reuters had forecast a reading of 13.3.

Any reading above zero indicates growth in the region’s manufacturing sector. July’s fall comes after the survey showed the region’s factory sector grew at its fastest rate in two years in June.

Stocks .DJI .IXIC .SPX showed little reaction, remaining steady at higher levels, but the dollar eased a touch against the euro EUR=. Government bonds US10YT=RR held steady, though they would usually benefit from signs of weaker growth and tamer price pressures.

“It still shows expansion, but activity is moderating,” said Gary Thayer, chief economist at A.G. Edwards and Sons in St. Louis, Missouri.

“The prices paid component is down slightly but still a little high.”

The employment index fell to 4.1 in July from 5.6 in June.

The new orders index, a gauge of future growth, fell to 11.3 in July from 18.3 in June. However, the six-month business conditions outlook surged to 30.4 from June’s 16.7.

The prices paid index slipped to 28.1 from 29.7. (Additional reporting by Ellen Freilich)

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