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 PHILADELPHIA, Nov. 5 /PRNewswire/ -- The Philadelphia economy slipped slightly in August, according to the latest reading of the Mellon PSFS economic index.
 The Mellon PSFS coincident index -- which gauges monthly civilian employment, industrial electric power sales, retail sales, and nonfarm wages and salaries for the Philadelphia metro area -- decreased 0.4 percent in August, following a revised gain of 0.3 percent in July. The index has fluctuated around a stable trend in recent months.
 "The August drop can be traced to a decline in real wages," said Richard Berner, senior vice president and chief economist, Mellon Bank (NYSE: MEL). "Nonfarm wages and salaries, after adjusted for inflation, fell 0.4 percent from July and have been moving sideways during the past nine months."
 The other three components have shown some improvement. Civilian employment and real retail sales both inched up 0.1 percent in August. Retail activity has increased 6 percent since the national recovery began in March l991. Industrial electric power sales, although flat in the latest month, have experienced a dramatic 7 percent rise since early l992.
 "Philadelphia shares many of the problems of other cities along the Atlantic seaboard," Berner said. "Exposure to defense cuts, in particular, is a danger that will limit the recovery. But, business conditions have steadied despite the area's difficulties."
 After falling 14.5 percent from early l990 to February l993, the Mellon PSFS index has increased 0.3 percent over the last five months.
 "Construction markets have bottomed and are poised for a turnaround," Berner said. "Manufacturing job losses have been modest and countered by extensive overtime, which suggests production has not declined. In fact, the upward trend in electric power use, and the Federal Reserve Bank of Philadelphia's local factory survey, point to growth."
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 /NOTE TO EDITORS: For technical information on the Mellon coincident index, contact Cheryl O'Brien, regional specialist, at 412-234-1529. Statistical information is available upon request./
 /CONTACT: Jim Dever of Mellon Bank, 215-553-4684/

CO: Mellon Bank ST: Pennsylvania IN: FIN SU: ECO

KC -- PG009 -- 1229 11/05/93 12:28 EST
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Publication:PR Newswire
Date:Nov 5, 1993

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