The numbers: The Philadelphia Fed said Thursday its gauge of regional business activity improved slightly to negative 5.9 in November from negative 9 in the prior month. Any reading below zero indicates deteriorating conditions.
Economists polled by the Wall Street Journal expected a negative 7.5 reading in November.
This is the 16th negative reading in the past 18 months.
Key details: The barometer on new orders fell 3 points but remained at positive 1.3 in November.
The shipments index dropped a sharp 10.8 points to negative 17.9.
The six-month business outlook fell from 9.2 in October to negative 2.1 this month, which was the first negative reading since May.
Big picture: Economists have been talking about the possibility of a stabilization in the factory sector.
Earlier this week, the Empire State index rose to 9.1 in November, the highest level since April.
The New York and Philadelphia Fed reports are the first regional manufacturing gauges that offer timely reads of the manufacturing sector.
In October, the national ISM factory index fell 2.3 percentage points to 46.7%.
Market reaction: Stocks
were set to open lower on Thursday while the 10-year Treasury yield
fell about 7 basis points to 4.46% in early morning trading