Manufacturing in the Philadelphia region unexpectedly expanded in October at the fastest pace in six months, a sign U.S. factories may provide more support for the recovery.
The Federal Reserve Bank of Philadelphia’s general economic index increased to 8.7 from minus 17.5 last month, the biggest one-month rebound in 31 years. Economists forecast minus 9.4 for the gauge, according to the median estimate in a Bloomberg News survey. Readings greater than zero indicate expansion in the area covering eastern Pennsylvania, southern New Jersey and Delaware.
Manufacturing may be picking up after companies put production plans on hold last month, when flagging financial markets and a rise in pessimism suggested slowing demand. Companies like Parker Hannifin Corp. (PH) have pointed to order gains, signaling the economy will avoid another recession.
“This is definitely a multispeed economy, and if you lump it all together it’s limping along, but manufacturing is a bright spot right now,” Robert Dye, chief economist at Comerica Inc. in Dallas, said before the report. “As long as auto sales hang in there, and if the consumer can hang in there even though we’ve seen very weak consumer confidence, then this economy won’t fall back into recession.”
Estimates for the manufacturing gauge from the 58 economists surveyed ranged from minus 16.5 to 1.
Stocks advanced after the manufacturing figure, with the Standard & Poor’s 500 Index climbing 0.1 percent to 1,211.15 at 10:31 a.m. in New York.
