Contrary to expectations, business activity in the manufacturing sector in the New York metropolitan area plummeted in August.
The Federal Reserve Bank of New York’s index of general business activity in the district’s manufacturing sector fell to minus 31.3 (July: plus 11.1) points. Economists surveyed by Dow Jones Newswires had only forecast a decline to plus 5.0 points.
A value above zero signals an expansion, a level below a contraction. The index provides a good insight into the assessments of the situation and the six-month expectations of the manufacturers in New York.
The index component for incoming orders fell to minus 29.6 (plus 6.2) points and that for employment to plus 7.4 (plus 18.0) points. A value of plus 32.7 (plus 31.3) was reported for the prices achieved.
The New York Business Index is usually the first regional indicator released by Fed branches in a month. Economists consider it, like the Philadelphia Fed indicator, to be a relatively reliable precursor to the much-regarded ISM index for US manufacturing.
NEW YORK (Dow Jones)
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