The bank's business condition index rose from negative 7.7 in June to 3.3 in July, surprising analysts. Economists expected the index to move up to negative 2.7.
The index for new orders rose from negative 7.6 in June to 0.1 in July.
The index for number of employees increased from 4.1 in June to 8.9 in July.
The Philadelphia Federal Reserve reported that the Philadelphia region's manufacturing activity has rebounded.