The New York Fed said its general business conditions index surged to a positive 10.7 in October after plunging to a negative 8.7 in September, with a positive reading indicating growth. Economists had expected the index to climb to a negative 1.8.

With the unexpected return to positive territory, the index indicated growth in New York manufacturing activity for the third time in the last four months.

The bigger than expected increase by the headline index partly reflected substantial turnarounds by new orders and shipments.

The new orders index shot up to a positive 3.7 in October from a negative 19.6 in September, while the shipments index spiked to a positive 14.4 in October from a negative 17.3 in September.

The numbers of employees index also jumped to a positive 6.2 in October from a negative 1.2 in September, indicating an increase in employment.

The report also said the prices paid index advanced to 52.4 in October from 46.1 in September, while the prices received index climbed to 27.2 in October from 21.6 in September.

Looking ahead, the New York Fed said firms grew more optimistic about the outlook, with the future general business conditions index jumping to 30.3 in October from 14.8 in September.

The index reached its highest level since hitting 36.7 in January, as close to half of firms expect conditions to improve in the months ahead.

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