Atlanta Fed Reports Rise in Manufacturing : Economy: July figures confirm other indications that the sector is improving. Prices received for finished products were up as those paid for raw materials fell.

The Federal Reserve Bank of Atlanta said production rose in July, confirming earlier reports that pointed to an improvement in manufacturing.

The regional Fed bank’s index was a seasonally adjusted 6.1 last month, compared to a revised negative 5.0 in June. Its Southeastern manufacturers production index rose to 14.2 from 5.0, indicating that manufacturing increased last month in that area as well.

The report could mean that manufacturing is slowly recovering from the levels reported in the second quarter, which were some of the lowest in years. Similar reports from the Federal Reserve Bank of Philadelphia and the National Assn. of Purchasing Management also suggest that manufacturing picked up in July.

“The manufacturing sector appears to be making its rebound,” said Michael Cosgrove, who heads The Econoclast, based in Dallas. “I expect the sector to gradually improve over the rest of 1995 and into the first half of 1996.”

The Atlanta Fed also said its index that tracks prices paid for raw materials fell last month as its index for prices received for finished products rose, meaning that manufacturers may finally be able to pass on small price increases.

The national portion of the survey is based on responses from 120 manufacturers in the Atlanta district on conditions in their industry nationwide, rather than on a national survey of manufacturers.

The indexes are calculated by subtracting the number of respondents who say manufacturing or prices are rising from the number who say they are falling. A negative reading occurs when the number of respondents who say they are falling is greater than the number who say they are increasing.

The Atlanta Fed’s report comes just over a month after the Federal Reserve Board cut a key interest rate to help stimulate the economy. The report may be a signal that the economy, at least in July, has responded.

The Atlanta Fed’s index for raw materials prices decreased to 20.3 in July from a revised 27.3 the month before. Its index for finished goods prices rose to 6.8 from 3.9.

The indexes do not attempt to calculate how much production or prices rose or fell. Rather, they measure how many of the manufacturers surveyed reported increased production or prices paid for raw materials.