Power lines and a nuclear-energy plant are shown in Goldsboro, Pa., near Philadelphia.

The numbers: The Philadelphia Fed said Thursday its gauge of business activity retreated only slightly in November from the highest level since before the pandemic. The regional Fed bank’s index slipped to 26.3 from 32.3 October. That’s still way above the average of 9.9 in 2019 and 20.9 in 2018. Any reading above zero indicates improving conditions. Economists polled by MarketWatch expected a 24.5 reading.

What happened: The headline index is based on a single question about business conditions unlike the national ISM manufacturing index, which is a composite based on several components.

The barometers for new orders and shipments moderated this month from October levels. Employment increases were more widespread. Readings for expectations over the next six months pulled back a bit.

The big picture: A similar survey conducted by the New York Fed saw much softer activity in November, with a reading of 6.3.

Manufacturing has been a bright spot as the economy recovers from the pandemic shutdown but economists are worried the pace of activity will slow as the virus has spread at a fast pace in recent weeks.

A separate report Thursday showed new U.S. applications for state unemployment benefits rose in mid-November for the first time in more than a month.

The national ISM factory index rose to 59.3 in October from 55.4 in the previous month. That was the second biggest gain since May 2009. The November report will be released on Dec. 1.

What are they saying?  “Overall, manufacturing is continuing to recover lost ground. However, the level of output remains below pre-pandemic
levels. The risk going forward comes from surging infection
outbreaks that could disrupt activity as well as weakening demand,” said Rubeela Farooqi, chief U.S. economist at High Frequency Economics, in a note to clients.

Market reaction: Stock were lower Thursday on worries about the surge in COVID-19 cases. The Dow Jones Industrial Average

was down 134 points in mid-morning trading.

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