US manufacturing in the mid-Atlantic states took a sharp hit in August amid wildly volatile US and global financial markets, the central bank said Thursday.
The Federal Reserve Bank of Philadelphia said manufacturing activity "dipped significantly," to an index of negative 30.7 in August from a positive 3.2 in July.
The Philly Fed index showed sharp declines from July in activity, shipments and new orders.
The regional central bank said that its indicator of future activity tumbled to 1.4 from 23.7 in July.
The business survey was conducted August 8-16, "overlapping a week of unusually high volatility in both domestic and international financial markets," it said.
"Survey responses suggest a deterioration in the labour market compared with July," it noted.
The current employment index fell 14 points to negative 5.2, its first negative reading in 12 months.
"This survey captures changes in business sentiment and the plunge, if it sticks, lends downside risk to the outlook for this quarter and next," said Ryan Sweet at Moody's Analytics.