Activity in the New York manufacturing sector has expanded at an accelerated rate in the month of May, according to a report released by the Federal Reserve Bank of New York on Tuesday, with the index of activity in the sector rising by much more than expected.
The New York Fed said its general business conditions index jumped to 17.1 in May from 6.6 in April, with a positive reading indicating an increase in regional manufacturing activity. Economists had expected the index to show a more modest increase to a reading of 10.0.
A substantial acceleration in the pace of shipment growth contributed to the increase by the headline index, with the shipments index surging up to 24.1 in May from 6.4 in April. With the increase, the shipments index reached its highest level in a year.
The new orders index showed a more modest increase, climbing to 8.3 in May from 6.5 in April and indicating a faster rate of new orders growth.
Additionally, the number of employees index crept up to 20.5 in May from 19.3 in April, pointing to a faster rate of job growth. The increase lifted the index to a one-year high.
On the inflation front the prices paid index fell to 37.4 in May from 45.8 in April, while the prices received index slid to 12.1 from 19.3.
The New York Fed noted that the future indexes remained positive but were generally lower, suggesting a less optimistic outlook for the next six months.
The futures general business conditions index fell to 29.3 in May from 43.1 in April, hitting its lowest level since October of 2011.
Thursday morning, the Philadelphia Federal Reserve is scheduled to release its monthly report on regional manufacturing activity. The Philly Fed Index is expected to edge up to 10.0 in May from 8.5 in April.
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