(Bloomberg) -- U.S. manufacturers are indicating greater success in their ability to pass along soaring costs of raw materials.
A gauge of prices received by Philadelphia-area factories jumped to 36.4 in May, the highest level in more than 29 years, according to a regional Federal Reserve report on Thursday. Two days ago, a similar figure from the New York Fed was the strongest since the start of 2012.
The data underscore a general pickup in manufacturing activity this month and help guide estimates for the closely followed Institute for Supply Management's monthly national factory index that is scheduled for release on June 1.
The question now is whether this recent upturn in pricing power will be sustained and whether merchants and service providers will pass those costs on to American consumers. One big caveat in the latest survey of Philadelphia-area factories is a deterioration in expectations for prices received in six months. This measure declined to the lowest level since July of last year.
Prices of raw materials used in manufacturing have started to retreat. The Commodity Research Bureau's daily price index of so-called raw industrials, which includes 13 inputs such as copper and steel scrap, cotton, zinc and rubber, has declined since reaching an almost four-year high in early March.
To contact the reporter on this story: Vince Golle in Washington at vgolle@bloomberg.net
To contact the editor responsible for this story: Scott Lanman at slanman@bloomberg.net
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