Manufacturing activity in New York has expanded modestly in the month of July, according to a report released by the Federal Reserve Bank of New York on Monday, with the index of activity in the manufacturing sector rising by more than anticipated.
The New York Fed said its general business conditions index rose to 7.4 in July from 2.3 in June, with a positive reading indicating growth in the manufacturing sector. Economists had expected the index to show a more modest increase to a reading of 4.5.
A notable acceleration in the pace of shipment growth contributed to the improvement in the sector, as the shipments index climbed to 10.3 in July from 4.8 in June.
The number of employees index also rose to 18.5 in July from 12.4 in June, pointing to a faster rate of job growth in the New York manufacturing sector.
On the other hand, the new orders index fell to a negative 2.7 in July from a positive 2.2 in June. The negative reading indicates the first contraction in new orders in eight months.
The unfilled orders index also fell to a negative 13.6 in July from a negative 5.2 in the previous month, suggesting a faster rate of contraction.
Peter Boockvar, managing director at Miller Tabak, said, "Bottom line, while the headline figure rose, the components were very mixed."
On the inflation front, the prices paid index tumbled to 7.4 in July from 19.6 in June, while the prices received index rose to 3.7 from 1.0.
Looking ahead, the New York Fed said the indexes for the six-month outlook generally remained favorable, although they held at levels below those seen earlier in the year.
The future general business conditions index fell to 20.2 in July from 23.1 in June, hitting its lowest level since October of 2011.
Thursday morning, the Philadelphia Federal Reserve is scheduled to release its report on regional manufacturing activity. The Philly Fed Index is expected to climb to a negative 8.0 in July from a negative 16.6 in June, although a negative reading would still indicate a contraction.
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