Business activity in the New York manufacturing sector grew at a substantially slower rate in the month of October, according to a report released by the Federal Reserve Bank of New York on Wednesday.
The New York Fed said its headline general business conditions index tumbled to 6.2 in October from 27.5 in September.
While a positive reading indicates continued growth in the New York manufacturing sector, economists had expected the index to show a much more modest decrease to 20.5.
The bigger than expected pullback by the index came after it jumped to a nearly five-year high in the previous month.
A significant downturn by new orders contributed to the steep drop by the headline index, with the new orders index plummeting to a negative 1.7 in October from a positive 16.9 in September.
The shipments index also plunged to 1.1 in October from 27.1 in September, indicating a notably slower rate of growth.
The report also said the prices paid index dropped to 11.4 in October from 23.9 in September, while the prices received index slid to 6.8 from 17.4.
On the other hand, the number of employees index climbed to 10.2 in October from 3.3 in the previous month, suggesting a faster rate of job growth.
The inventories index also climbed to a positive 2.3 in October from a negative 7.6 in September, indicating that inventories increased slightly after declining for three straight months.
Looking ahead, the New York Fed said most of the indexes assessing the future outlook were down from last month but remained fairly high by historical standards.
The index for future general business conditions fell to 41.7 in October from 46.7 in September but conveyed an expectation that activity would continue to grow in the months ahead.
Thursday morning, the Philadelphia Federal Reserve is scheduled to release its report on regional manufacturing activity in the month of October.
Economists expect the Philly Fed’s index of regional manufacturing activity to dip to 20.0 in October from 22.5 in September.
by RTT Staff Writer
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New York Manufacturing Index Indicates Notably Slower Growth In October
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