Philly Fed factory activity gains in February

NEW YORK (Reuters) - The pace of factory activity in the U.S. Mid-Atlantic region gained momentum in February as new orders picked up, a survey showed on Thursday.

The Philadelphia Federal Reserve Bank said its business activity index rose to 10.2 from 7.3 the month before, topping economists' expectations for 9.5, according to a Reuters poll.

Any reading above zero indicates expansion in the region's manufacturing. The survey covers factories in eastern Pennsylvania, southern New Jersey and Delaware.

It is seen as one of the first monthly indicators of the health of U.S. manufacturing leading up to the national report by the Institute for Supply Management.

It was the latest in a string of stronger-than-expected economic data, including a surprise drop in new claims for unemployment benefits earlier on Thursday.

"Metric after metric, uniformly, is doing better, and barring any unforeseen problems from Europe it appears we're in a self-sustaining cycle of growth," said Jim Awad, managing director at Zephyr Management in New York.

"We're better than where we were but not as good as we'd hope."

New orders gained to 11.7 from 6.90, while shipments accelerated to 15.0 from 5.7. Prices paid crept up to 38.7 from 31.8.

Measures of employment were mixed. The gauge of the number of employees dropped off to its lowest level since August at 1.1 from 11.60, while the average employee work week jumped to 10.1 from 5.0.

Survey respondents' view on the coming months was less robust with the gauge of business conditions for the next six months falling to 33.3 from 49.0.

The release was overshadowed in financial markets by the jobs data earlier and as Greece was working to secure a needed bailout.

(Reporting By Leah Schnurr, additional reporting by Ryan Vlastelica; Editing by Chizu Nomiyama)