New York Manufacturing Index Indicates Significant Turnaround In June

A report released by the Federal Reserve Bank of New York on Thursday showed a significant turnaround in regional manufacturing activity in the month of June.

The New York Fed said its general business conditions index soared to a positive 6.6 in June from a negative 31.8 in May, with a positive reading indicating growth. Economists had expected the index to jump to a negative 15.1.

The much bigger than expected surge by the headline index reflected substantial turnarounds by both new orders and shipments.

The new orders index spiked to a positive 3.1 in June from a negative 28.0 in May, while the shipments index skyrocketed to a positive 22.0 in June from a negative 16.4 in May.

Meanwhile, employment continued to show a modest contraction, as the number of employees index edged down to a negative 3.6 in June from a negative 3.3 in May.

The report also showed the prices paid index slumped to 22.0 in June from 34.9 in May, while the prices received index tumbled to 9.0 in June from 23.6 in May.

Looking ahead, the New York Fed said firms became more optimistic about the six-month outlook, with the index for future business conditions surging to 18.9 in June from 9.8 in May.

The Federal Reserve Bank of Philadelphia released a separate report on Thursday showing regional manufacturing activity contracted at a modestly faster rate in the month of June.

The Philly Fed said its diffusion index for current activity fell to a negative 13.7 in June from a negative 10.4 in May, with a negative reading indicating contraction. Economists had expected the index drop to a negative 14.0.

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