New York factory activity rebounds in April-NY Fed
FILE PHOTO: Manhattan skyline is seen during sunset in New York City, New York, U.S. March 29, 2023. REUTERS/Amanda Perobelli
WASHINGTON (Reuters) – The New York Federal Reserve said on Monday its barometer of manufacturing activity in New York State increased for the first time in five months in April as measures of new orders and shipments surged.
The regional Fed’s “Empire State” index on current business conditions jumped 35.4 points to a reading of 10.8 this month. Economists polled by Reuters had forecast the index at -18.0.
A reading above zero signals the New York manufacturing sector is growing. The rebound is an encouraging sign for national manufacturing activity, which had been undermined by higher interest rates and the rotation of spending back to services from goods.
The Federal Reserve reported last Friday that manufacturing output rose at a 0.3% annualized rate in the first quarter after declining at a 3.1% pace in the October-December period.
Economists believe that manufacturing is in recession. The Institute for Supply Management’s measure of national manufacturing activity has contracted for five straight months, with all its subcomponents falling below the 50 threshold in March for the first time since 2009.
The New Fed survey’s gauge of new orders shot up 46.8 points to 25.1 this month, while the shipments measure rebounded 37.3 to 23.9. But manufacturing employment continued to decline, while inflation at the factory gate subsided.
Still, businesses did not expect a significant improvement in conditions over the next six months. The survey’s measure of future business conditions rose to 6.6 from 2.9 in March.
New orders and shipments were seen increasing modestly and employment growing. The capital spending index rose 3.2 points to 16.5, while the technology spending fell to 10.3 from 13.3 in March.