While the Federal Reserve Bank of New York released a report on Monday showing a modest improvement in New York manufacturing activity in the month of April, the index of activity in the sector fell by much more than economists had been anticipating.
The New York Fed said its general business conditions index plunged to 6.6 in April from 20.2 in March, although a positive reading indicates an increase in manufacturing activity. Economists had expected the index to edge down to 18.0.
Peter Boockvar, managing director at Miller Tabak, said, "While well below expectations, the number is very volatile and there are many more regional surveys to be seen before we can argue that manufacturing is clearly slowing. This said, moderation in Asia and recession in Europe are obvious headwinds."
A notable slowdown in the pace of shipment growth contributed to the drop by the headline index, with the shipments index falling to 6.4 in April from 18.2 in March.
The new orders index also slipped to 6.5 in April from 6.8 in March, indicating a modest slowdown in the pace of new orders growth.
Meanwhile, New York Fed said the number of employees index climbed to 19.3 in April from 13.6 in March, pointing to an increase in employment in the New York manufacturing sector.
The report showed a mixed picture regarding inflation, as the prices paid index dipped to 45.8 in April from 50.6 in March, while the prices received index climbed to 19.3 from 13.6.
Looking ahead, the future general business conditions index slid to 43.1 in April from 47.5 in March. The New York Fed said roughly half of respondents expect conditions to improve over the next six months.
Thursday morning, the Philadelphia Federal Reserve is scheduled to release its report on regional manufacturing activity in the month of April.
The Philly Fed's index of regional manufacturing activity is expected to dip to 12.0 in April from 12.5 in March, with a positive reading indicating growth.
by RTT Staff Writer
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