Philly Fed Manufacturing Index drops notable in January

Manufacturing activity in the Philadelphia area decreased notably in the first month of 2013 as companies are becoming more concerned about the U.S. government spending abroad which could have a negative impact on economic growth. The Federal Reserve Bank of Philadelphia's general economic index fell from 4.6 in December to minus 5.8 in January, where reading below zero is used as a sign of contraction.

"Manufacturing is going to be touch-and-go over the next few months until we get some fiscal clarity," said Ryan Sweet, a senior economist at Moody's Analytics Inc. in West Chester.

The New York and Philadelphia surveys are "a sign that the fiscal deal struck on new year's was a good first step, but it didn't reduce the uncertainty."