Manufacturing in the Philadelphia Federal reserve's region unexpectedly expanded in August for the first time in almost a year. Thursday's report is yet another sign that Q3 economic growth will indeed be stronger than many continue to purport.
According to the report:
"The survey’s broadest measure of manufacturing conditions, the diffusion index of current activity, increased from -7.5 in July to 4.2 this month. This is the highest reading of the index since November 2007."
The growth in manufacturing activity was far better than any of 52 economists had forecast in a Bloomberg survey of the prognosticators.
It was the second strong regional showing for manufacturing this week. The New York Fed’s Empire index, released on Monday, showed that the NY region’s manufacturing sector also grew for the first time in more than a year.
Additionally the Conference Board's index of leading economic indicators climbed 0.6 in July after rising 0.8 percent the prior month. It is the first time the index has climbed for four straight months since 2004.
Earlier this week GM said it called back 1,350 union workers, its biggest one-time increase in jobs since 2006, as new car sales are not significantly exceeding expectations. Across the board, US auto factories are now adding shifts, scheduling overtime, and restoring weeks of production at select factories following the significant success of the Cash for Clunkers stimulus program.