New York Fed Index Indicates Continued Improvement In Manufacturing Conditions

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Conditions for New York manufacturers continued to improve in September, according to a report released by the Federal Reserve Bank of New York on Tuesday, with the index of activity in the sector moving more firmly into positive territory.

The New York Fed said the general business conditions index rose to 18.9 in September from 12.1 in August, with a positive reading indicating growth in the manufacturing sector. Economists had been expecting the index to edge up to a reading of 15.0.

With the increase, the index rose to its highest level since November of 2007, indicating the second consecutive month of expansion following fifteen consecutive months of contraction.

Commenting on the data, Peter Boockvar, equity strategist for Miller Tabak, said, "Manufacturing is a key component of the 2nd half recovery theme and today's number confirms that improvement in the New York metro area."

The improvement in the sector was partly due to an acceleration in the pace of new orders growth, with the new orders index rising to 19.8 in September from 13.4 in August. The new orders index also reached its highest level since November of 2007.

At the same time, the report also showed that the shipments index slipped to 5.3 in September from 14.1 in the previous month, indicating a slower pace of growth.

The New York Fed also indicated that employment remained sluggish, with the number of employees index edging down to a negative 8.3 in September from a negative 7.5 in August. The employment index remained negative for the fifteenth consecutive month.

On the inflation front, the report showed that the prices paid index rose to 20.2 in September from 13.8 in August, while the prices received index edged up to a negative 3.6 from a negative 12.8 in the previous month.

Looking ahead, the New York Fed noted that the future indexes were generally positive and near last month's levels. The future general business conditions index rose to 52.3 in September from 48.2 in August, reaching its highest level since October of 2004.

While the future new orders index, the future shipments index and the future number of employees index edged down from the previous month, they remained positive.

On Thursday, the Philadelphia Federal Reserve is due to release its regional manufacturing report, with the index of activity in the sector expected to rise to 8.0 in September from 4.2 in August.

Conditions for New York manufacturers continued to improve in September, according to a report released by the Federal Reserve Bank of New York on Tuesday, with the index of activity in the sector moving more firmly into positive territory. The New York Fed said the general business conditions index rose to 18.9 in September from 12.1 in August, with a positive reading indicating growth in the manufacturing sector. Economists had been expecting the index to edge up to a reading of 15.0. (Market News Provided by RTTNews)