Philadelphia Fed manufacturing index jumps to highest in more than 3 years

Manufacturing activity in the Philadelphia region was stronger than expected in August, the Philadelphia Federal Reserve said Thursday.

The diffusion index of current general activity increased from a reading of 23.9 in May to 28.0 this month, the highest since March 2011. The index has remained positive for six consecutive months and is at its highest reading in over three years.

Analysts had expected a drop to 19.7.

However, the current new orders and shipments indexes moved lower this month, decreasing 19.5 points and 17.7 point, respectively.

Indicators also suggest improved labor market conditions this month. The employment index remained positive for the 14th consecutive month but fell 3 points. The workweek index was also positive for the sixth consecutive month and increased 1 point.

The prices paid index decreased nearly 10 points from July to its lowest reading in three months. The prices received index, which reflects firms’ own final goods prices, also decreased, from 16.8 to 4.2.

Most of the survey’s broad indicators of future growth showed notable improvement this month. The future general activity index increased 8 points and is at its highest reading since June 1992.