New York Manufacturing Index Jumps To Five-Month High In February
New York manufacturing activity grew at its fastest pace in months in February, according to a report released by the Federal Reserve Bank of New York on Tuesday.
The New York Fed said its general business conditions index jumped to 12.1 in February from 3.5 in January, with a positive reading indicating growth in regional manufacturing activity. Economists had expected the index to rise to 6.0.
With the much bigger than expected increase, the general business conditions index reached its highest level since hitting 17.0 last September.
The surge by the headline index was partly due to an acceleration in the pace of new orders growth, as the new orders index climbed to 10.8 in February from 6.6 in January.
The number of employees index also inched up to 12.1 in February from 11.2 in January, indicating a slightly faster rate of job growth.
The report also said the prices paid index surged up to 57.8 in February from 45.5 in January, while the prices received index climbed to 23.4 from 15.2.
On the other hand, the shipments index slid to 4.0 in February from 7.3 in January, pointing to a slowdown in the pace of growth.
The New York Fed said the index for future business conditions rose to 34.9 in February from 31.9 in January, suggesting firms remain optimistic about future conditions.
“Manufacturing’s near-term prospects are fairly bright, with solid goods demand, pandemic fiscal relief from the American Rescue Plan, and inventory restocking all set to keep activity growing at a healthy clip,” Oren Klachkin, Lead U.S. Economist at Oxford Economics.
He added, “Looking farther ahead, factory gears will grind at a slower speed heading into the summer months as vaccine diffusion and improving health conditions tilt the recovery in favor of hard-hit services, though manufacturing will stay well supported overall in 2021.”
On Thursday, the Philadelphia Federal Reserve is scheduled to release its report on regional manufacturing activity in the month of February. The Philly Fed Index is expected to dip to 20.0 in February from 26.5 in January.
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