The numbers: The Philadelphia Fed said Thursday its gauge of regional business activity fell to 23.8 in October from 30.7 in the prior month. Any reading above zero indicates improving conditions.
The index had jumped sharply in September and a pullback was expected. Economists polled by the Wall Street Journal expected a 24.5 reading. Any reading above zero indicates expansion in the manufacturing sector.
Big picture: A reading of 23.8 is still in solid growth territory, economists said. Manufacturing is a bright spot in the economy even as firms struggle to meet demand due to unexpected bottlenecks.
Last week, a similar survey conducted by the New York Fed showed manufacturing fell by 14.5 points to 19.8 in October.
Investors look at the two reports mainly to get a sense of the U.S. national ISM index. In September, the ISM factory index rose to 61.1% from 59.9% in prior month.
The headline index is based on a single stand-alone question about business conditions unlike the national ISM manufacturing index which is a composite based on components
The barometer on new orders jumped 14.9 points to 30.8. The shipments index inched up 1 point to 30. The measure on six-month business outlook rose x4.2 points to 24.2.
Unfilled orders rose in October and delivery times lengthened. Inventories slipped a bit.
Prices paid rose 3 points to 70 in October while the prices received index fell 1.8 points. The employees index rose in the month.
Market reaction: Stocks
were set to open lower on Thursday after a run up in recent days on strong third quarter earnings.