The Philadelphia Fed’s index of mid-Atlantic manufacturing activity surged to a 21-year high, blowing past economists’ expectations of a gain of 18.0. The reading is the highest since December of 1993 and way above expectations released in a survey by the Wall Street Journal.
Readings under zero denote contraction, and above-zero readings denote expansion. Some are expressing both optimism, but also a skepticism that the survey may be an outlier. Earlier Thursday, survey data provider Markit said found U.S. manufacturing activity in November nationwide is at its weakest level since January.
However, the Philadelphia Fed’s index of general business activity encompassing the regional factory sector rocketed to 40.8 in November, up from 20.7 in October and the 22.5 measured in September.
“The percentage of firms reporting increased activity this month (49%) was significantly greater than the percentage reporting decreased activity (9 percent),” the report said.
Their new orders index increased to 35.7 from 17.3 last month, while the shipments index jumped to 31.9, up from 16.6 the previous month.
Demand for labor in the Philly area increased to the highest amount measured in more than three years. The employees index rose to 22.4 from 12.1 in October, and the workweek index also increased to 7.8 this month. In an apparent contradiction, it actually fell to -1.3 in October, down from 4.4 in September.
Fewer Philadelphia area manufacturers are trying to raise their own selling prices after a flurry of markups reported in October. The prices-received index slowed to 11.5 after it jumped to 20.8 from 8.8. The prices-paid index fell to 17.3 from 27.6.
Philadelphia manufacturers remain generally otimistic about the next six months. The general business expectations index strangely only increased to 57.7 from 54.5 in October. The expected employment index rose to 31.5 from 28.0.