New York Fed Index Rises To Highest Level In Over Five Years

Conditions for New York manufacturers improved significantly in October, according to a report released by the Federal Reserve Bank of New York on Thursday, with the index of activity in the sector rising to its highest level in over five years.

The New York Fed said its general business conditions index rose to 34.6 in October from 18.9 in September, with a positive reading indicating growth in the manufacturing sector. Economists had been expecting the index to fall to a reading of 17.5.

With the unexpected increase, the business conditions index rose to its highest level since May of 2004, when the index came in at 35.0.

The unexpected increase by the index was partly due to notable improvements in new orders and shipments. The new orders index rose to 30.8 in October from 19.8 in September, while the shipments index jumped to 35.1 from 5.3 in the previous month.

Employment also showed a significant improvement compared to the previous month, with the number of employees index rising to 10.4 in October from a negative 8.3 in September. This marks the first positive reading for the index since June of 2008.

On the inflation front, the prices paid index edged down to 19.5 in October from 20.2 in September, while the prices received index fell to a negative 5.2 from a negative 3.6 in the previous month.