Philadelphia-area manufacturing activity contracted at a slower rate in the month of October, according to a report released by the Federal Reserve Bank of Philadelphia on Thursday.
The Philly Fed said its diffusion index for current general activity climbed to a negative 9.0 in October from a negative 13.5 in September, although a negative reading still indicates contraction. Economists had expected the index to increase to a negative 6.6.
The increase by the headline index partly reflected notable turnarounds by both new orders and shipments.
The new orders index jumped to a positive 4.4 in October from a negative 10.2 in September, while the shipments index surged to a positive 10.8 in October from a negative 3.2 in September.
The report also showed a turnaround in employment, with the number of employees index climbing to a positive 4.0 in October from a negative 5.7 in September.
Meanwhile, the Philly Fed said the prices paid index fell to 23.1 in October from 25.7 in September, and the prices received index edged down to 14.6 in October from 14.8 in September.
Looking ahead, the report said firms continue to expect growth overall over the next six months, but most future indicators declined.
The diffusion index for future general activity edged down to 9.2 in October from 11.1 in September amid a steep drop by the future shipments index.
A separate report released by the Federal Reserve Bank of New York on Monday showed a downturn in regional manufacturing activity in the month of October.
The New York Fed said its general business conditions index fell to a negative 4.6 in October from a positive 1.9 in September. Economists had expected the index to drop to a negative 7.0.