New York Manufacturing Activity Contracts Faster Than Expected In October

(RTTNews) - A report released by the Federal Reserve Bank of New York on Monday showed regional manufacturing activity has contracted by more than expected in the month of October.

The New York Fed said its general business conditions index slid to a negative 9.1 in October from a negative 1.5 in September, with a negative reading indicating a contraction in regional manufacturing activity. Economists had expected the index to dip to a negative 4.0.

The bigger than expected decrease by the headline index was partly due to a steep drop by the shipments index, which tumbled to a negative 0.3 in October from a positive 19.6 in September.

The report also showed a modest slowdown in the pace of job growth, as the number of employees index dipped to 7.7 in October from 9.7 in September.

Meanwhile, the new orders index was unchanged from the previous month at 3.7, indicating a slight increase in orders.

The prices paid index jumped to 48.6 in October from 39.6 in September, rebounding after falling significantly over the prior three months, while the prices received index edged down to 22.9 from 23.6.

Looking ahead, the New York Fed said firms do not expect business conditions to improve over the next six months, with the index for future business conditions slumping to a negative 1.8 in October from a positive 8.2 in September.

The indexes for future new orders and shipments remained depressed, although employment is expected to continue to increase.

On Thursday, the Philadelphia Federal Reserve is scheduled to release its report on regional manufacturing activity in the month of October.

The Philly Fed Index is expected to rise to a negative 5.0 in October from a negative 9.9 in September, but a negative reading would still indicate a contraction.