Economic Report: Philly Fed manufacturing index lurches to a 5-month high in October

The numbers:

Manufacturing activity in the mid-Atlantic heated up in October, the Philadelphia Fed said Thursday. Its gauge jumped 4.1 points to 27.9, the strongest reading since May.

Any reading over zero signals improving conditions. Economists had forecast a reading of 20.2.

What happened:

Overall factory conditions improved, but some details of the report softened. The new orders gauge slipped to 19.6 from 29.5, signalling slower growth in the future. The shipments gauge also declined, to 24.4 from 37.8. But workforce measurements strengthened: the gauge that tracks the number of employees soared to 30.6 from 6.6, and the workweek tracker rose to 19.4 from 11.9.

Big picture:

Growth in manufacturing activity isn’t just steady, it’s accelerating, and firms surveyed by the regional bank remain optimistic about the future. There are some downsides to stronger growth, however: more than 40% of the firms surveyed reported increases in the prices they paid for raw materials this month.