New York Manufacturing Activity Unexpectedly Contracts

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Manufacturing activity in the New York region unexpectedly contracted in the month of August, 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 fell to a negative 4.21 in August from a positive 0.55 in July. A negative reading indicates a contraction in New York manufacturing activity.

The decline by the index came as a surprise to economists, who had expected the index to climb to a positive 2.50.

The unexpected decrease by the headline index came even though most of the component indexes moved higher during the month.

The new orders index climbed to a positive 1.04 in August from a negative 1.82 in July, while the shipments index jumped to 9.01 from 0.70.

The New York Fed said the number of employees index also rose to a negative 1.03 in August from a negative 4.40 in July, pointing to little change in employment levels.

The prices received index also edged up to 2.06 in August from 1.10 in July, while the prices paid index dipped to 15.46 from 18.68.

Looking ahead, the New York Fed said forward-looking indicators suggest companies remain optimistic about future conditions, though to a lesser extent.

The index for future business conditions fell for the second consecutive month, dropping to 23.74 in August from 29.24 in July.

On Thursday, the Philadelphia Fed is scheduled to release its report on regional manufacturing activity. The Philly Fed Index is expected to climb to a positive 2.0 in August from a negative 2.9 in July.

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