Manufacturers in New York state expanded more quickly this month than in November, driven by a big jump in new orders.
The Federal Reserve Bank of New York says its Empire State index rose to a reading of 9 in December, up from 1.5 in the previous month. Anything above zero signals that factories are doing more business.
The figures add to other evidence that manufacturing is rebounding after a rough 18 months. Businesses have been clearing out their stockpiles of unsold goods and spending less on machinery and equipment, which have lowered factory output. Yet nationwide surveys in the past two months suggest manufacturing is growing again, if slowly.
Still, a gauge of employment fell to minus 12.2, from minus 10.9, which means factories cut jobs last month.
Meanwhile, a separate reading on business conditions in the Philadelphia region in December came in much stronger than expected.
The Philadelphia Fed's business index came in at 21.5 more than double the 9.0 reading economists had expected and up from the prior month's reading of 7.6.
—CNBC contributed to this report.