The Philadelphia Fed’s monthly Business Outlook Survey is out.

The headline index surged to 22.3 in September from 9.3 in August, coming in well above expectations for a slighter rise to 10.3.

Below is a summary of the data from the release:

The survey’s broadest measure of manufacturing conditions, the diffusion index of current activity, increased from 9.3 in August to 22.3 this month (see Chart). The index has now been positive for four consecutive months and is at its highest reading since March 2011. The percentage of firms reporting increased activity this month (36 per cent) was greater than the percentage reporting decreased activity (14 per cent).

The demand for manufactured goods, as measured by the current new orders index, increased 16 points, to 21.2. Shipments rebounded from last month: The current shipments index increased 22 points. The diffusion indexes also suggest that, on balance, inventories and deliveries were near steady this month, while unfilled orders increased slightly.

Labour market indicators showed improvement this month. The current employment index increased 7 points, to 10.3, its highest reading since April of last year. The percentage of firms reporting increases in employment (21 per cent) exceeded the percentage reporting decreases (10 per cent). Firms also reported a longer average workweek compared with last month, and the index increased 15 points, to 12.2.

Goldman Sachs chief economist Jan Hatzius says the Philly Fed’s monthly survey is one of the best predictors of economic growth.

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