The Philadelphia Federal Reserve Bank released its manufacturing index on Thursday. The index dropped to -1.8 in May from -1.6 in April, missing expectations for an increase to 3.5.

A reading above zero indicates expansion, while a reading below zero indicates contraction.

"This month's Manufacturing Business Outlook Survey suggests essentially no growth of the region's manufacturing sector. The survey's indicators for general activity, new orders, shipments, and employment all remained negative," the Philadelphia Federal Reserve Bank said in its survey.

The shipments index climbed to -0.5 in May from -10.8 in April.

The new orders index decreased to -1.9 in May from 0.0 in April.

The prices paid index rose to 15.7 in May from 13.2 in April, while the prices received index increased to 14.8 from 7.4.

The number of employees index was up to -3.3 in May from -18.5 in April.

According to the report, the future general activity index fell to 36.1 in May from 42.2 in April.