Conditions for New York manufacturers have continued to decline at a modest pace in January, according to a report released by the Federal Reserve Bank of New York on Tuesday, with the index of regional manufacturing activity stuck in negative territory for the sixth consecutive month.
The New York Fed said its general business conditions index edged down to a negative 7.8 in January from a negative 7.3 in December, with a negative reading indicating a contraction in regional manufacturing activity.
The decrease by the general business conditions index came as a surprise to economists, who had expected the index to climb to 0.0.
Jim O'Sullivan, chief U.S. economist at High Frequency Economics, said, "While the Empire State index is negative, it has been negative for several months. The national manufacturing ISM index has not been as weak during that period."
The continued weakness in the New York manufacturing sector was partly due to an acceleration in the pace of decline in new orders, with the new orders index falling to a negative 7.2 in January from a negative 3.4 in December.
The shipments index also tumbled to a negative 3.1 in January from a positive 11.9 in December, suggesting a swing to contraction by shipments.
While the report also showed that the number of employees index climbed to a negative 4.3 in January from a negative 9.7 in December, the negative reading points to a continued contraction.
On the other hand, the prices paid index rose to 22.6 in January from 16.1 in December and the prices received index jumped to 10.8 from 1.1. The readings indicate faster price growth.
The New York Fed also said the indexes for the six-month outlook remained positive and rose slightly compared to the previous month.
The future general business conditions index rose 22.4 in January from 18.0 in December, although it remains at levels well below those seen a year earlier.
by RTT Staff Writer
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