Growth in Philadelphia-area manufacturing activity continued in October, according to a report released by the Federal Reserve Bank of Philadelphia on Thursday, although the pace of growth slowed compared to the previous month.
The Philly Fed said its diffusion index of current activity dipped to 19.8 in October from 22.3 in September, with a positive reading indicating growth in regional manufacturing activity.
Economists had been expecting the Philly Fed's manufacturing index to show a more substantial decrease to a reading of about 15.0.
While the headline index showed a modest decrease compared to the previous month, the details of the report were largely positive.
The report showed that the news orders index jumped to 27.5 in October from 21.2 in September, while the unfilled orders index climbed to 9.1 from 4.3.
The number of employees index also rose to 15.4 in October from 10.3 in September, reaching its highest reading since May of 2011.
On the other hand, the shipments index dipped to 20.4 in October from 21.2 in the previous month, although it still indicated an expansion.
The report also showed that the prices paid index fell to 21.7 in October from 25.3 in September, while the prices received index edged up to 14.2 from 12.7.
Looking ahead, the Philly Fed noted that the survey's future indicators have suggested markedly improved optimism among the reporting manufacturers in recent months.
The future general activity index increased to 60.8 in October from 58.2 in September, the most optimistic level since September of 2003.
Peter Boockvar, chief market analyst at the Lindsey Group said, "Bottom line, no government related angst seen in this data, especially with the outlook … that likely believes that whatever noise out of D.C. is irrelevant to American business and/or is just a temporary impediment."
"In measuring the government shutdown, the Richmond manufacturing region will be most reflective of it which is out next week," he added.
On Tuesday, the New York Federal Reserve released a separate report showing that business conditions for New York manufacturers were little changed in the month of October.
The report showed that the general business conditions index fell to 1.5 in October from 6.3 in September. A positive reading indicates an increase in regional manufacturing activity, although economists had expected the index to climb to 7.0.
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