Activity in the New York manufacturing sector unexpectedly expanded at a slower pace in the month of September, according to a report released by the Federal Reserve Bank of New York on Monday.
The New York Fed said its general business conditions index edged down to 6.3 in September from 8.2 in August but remains in positive territory.
While a positive reading indicates continued growth in New York manufacturing activity, economists had expected the index to climb to 9.0.
Even though the headline index fell to a four-month low, Amna Asaf, an economist at Capital Economics, said, "We are not too concerned as that index is based on a separate question on general business conditions. In contrast, most of the more tangible indices in the survey improved."
The report showed that the new orders index climbed to 2.4 in September from 0.3 in August, while the shipments index surged up to 16.4 from 1.5.
On the other hand, the number of employees index dipped to 7.5 in September from 10.8 in the previous month, indicating a slowdown in the pace of job growth.
"The weighted average of these more tangible indices rose to +4.8, from +1.6," Asaf said. "This didn't close the gap with the national ISM index, which has persisted for the past three months, and points to a drop in the latter from the 55.7 recorded in August."
The prices paid index edged up to 21.5 in September from 20.5 in August, while the prices received index rose to 8.6 from 3.6.
Looking ahead, the New York Fed said the indexes for the six-month outlook mostly conveyed increasingly widespread optimism about future business conditions.
The future general business conditions index rose for the third straight month, climbing to 40.6 in September from 37.4 in August. The increase lifted the index to its highest level since April of 2012.
Thursday morning, the Philadelphia Federal Reserve is scheduled to release a separate report on Philadelphia-area manufacturing activity in the month of September.
Economists expect the Philly Fed Index to inch up to 10.0 in September from 9.3 in August, with a positive reading indicating an increase in regional manufacturing activity.
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