The Richmond Fed’s survey of business activity signalled a pick up in activity in the east coast.
The headline manufacturing index unexpectedly jumped to 14 in September from 12 in August.
This was better than the decline to 10 expected by economists.
“Shipments and the volume of new orders picked up this month,” the Richmond Fed said in its report. “Manufacturing employment also strengthened this month, while average wages rose at a slower pace and the average workweek lengthened.”
Importantly, the outlook of respondents was strong:
Manufacturers remained optimistic about future business conditions. Survey participants expected faster growth in shipments and in the volume of new orders in the six months ahead. Producers looked for increased capacity utilization and anticipated rising backlogs. Expectations were for longer vendor lead times.
Survey participants anticipated steady growth in the number of employees and the average workweek during the next six months. Additionally, they expected faster growth in wages.
Prices of raw materials and finished goods rose at faster pace in September compared to last month.
For the six months ahead, manufacturers expected slower growth in prices paid, and anticipated faster growth in prices received.