New York Manufacturing Index Jumps To Nearly Five-Year High In September

(RTTNews) - Business activity in the New York manufacturing sector has expanded at a robust pace in the month of September, according to a report released by the Federal Reserve Bank of New York on Monday, with the index of activity in the sector jumping to its highest level in almost five years.

The New York Fed said its headline general business conditions index surged up to 27.5 in September from 14.7 in August, with a positive reading indicating an increase in activity in the New York manufacturing sector. Economists had expected the index to edge up to 16.0.

With the much bigger than expected increase, the general business conditions index reached its highest level since hitting 32.6 in October of 2009.

The jump by the headline index was partly due to an acceleration in the pace of new orders growth, with the new orders index climbing to 16.9 in September from 14.1 in August.

The shipments index also edged up to 27.1 in September from 24.6 in August, indicating a slightly faster rate of growth.

On the other hand, the number of employees index fell to 3.3 in September from 13.6 in August, although the positive reading still points to a slight increase in jobs.

The prices paid index also dipped to 23.9 in September from 27.3 in August, while the prices received index jumped to 17.4 from 8.0.

Looking ahead, the New York Fed said the indexes for the six-month outlook conveyed a high degree of optimism about future business conditions.

The index for future general business conditions came in at 46.7 in September, nearly unchanged from 46.8 in the previous month.

Peter Boockvar, managing director at the Lindsey Group, said, "Bottom line, the headline figure was definitely encouraging but the internals were more uneven in this very volatile measure of NY manufacturing."

"It is because of this volatile nature that the number is rarely market moving and less so than the Philly report which comes out on Thursday," he added.

Thursday morning, the Philadelphia Fed is scheduled to release its report on regional manufacturing activity. The Philly Fed Index is expected to drop to 23.0 in September from 28.0 in August.