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New York Manufacturing Activity Unexpectedly Contracts In April

empirestate 041515

Manufacturing activity in New York unexpectedly contracted in the month of April, according to a report released by the Federal Reserve Bank of New York on Wednesday.

The New York Fed said its general business conditions index dropped to a negative 1.2 in April from a positive 6.9 in March, with a negative reading indicating a contraction in regional manufacturing activity.

The index turned negative for the first time since last December, surprising economists, who had expected the index to inch up to 7.0.

The unexpected decrease by the headline index was partly due to a continued decline in new orders, as the new orders index dropped to a negative 6.0 in April from a negative 2.4 in March.

The number of employees index also fell to 9.6 in April from 18.6 in the previous month, although the positive reading continued to point to an increase in employment levels.

On the other hand, the New York Fed said the shipments index climbed to 15.2 in April from 7.9 in March, indicating that shipments expanded at a solid pace.

The report said the prices paid index also rose to 19.2 in April from 12.4 in March, while the prices received index fell to 4.3 from 8.3.

Looking ahead, the New York Fed said many of the indexes assessing the six-month outlook conveyed more optimism about future business activity than they had in February and March.

The index for future general business conditions climbed for a second consecutive month, rising to 37.1 in April from 30.7 in March.

Peter Boockvar, managing director at the Lindsey Group, said, "Bottom line, after a punk economic performance in Q1 for the U.S., we're of course hoping for a nice rebound in Q2 but today's NY region reported a disappointing figure."

"Philly reports tomorrow and we'll see if this is just a trend in the NY area or something more," he added.

Thursday morning, the Philadelphia Federal Reserve is scheduled to release the results of its regional manufacturing survey for the month of April.

Economists currently expect the Philly Fed index to climb to 6.3 in April after edging slightly lower to 5.0 in March.

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