A measure of New York state factory activity contracted in October, reflecting a pullback in demand and suggesting a slowing in inflationary pressures.
(Bloomberg) — A measure of New York state factory activity contracted in October, reflecting a pullback in demand and suggesting a slowing in inflationary pressures.
The Federal Reserve Bank of New York’s general business conditions index decreased 6.5 points to minus 4.6 this month, data showed Monday. A reading below zero indicates contraction, and the latest figure was slightly better than the median forecast in a Bloomberg survey of economists.
The index has been subject to large month-to-month swings over the last two years. The manufacturing sector has been under stress amid rising interest rates, lingering inflation and tepid global demand.
A gauge of new orders fell back into contraction in October, while the index of shipments remained in expansionary territory despite a sizable decline. The group’s measure of unfilled orders dropped significantly to minus 19.1, the lowest since the onset of the pandemic.
Fewer firms reported higher prices received in the month, indicating some easing of inflationary pressures. Six months from now, the prices received measure dropped to the lowest level since September 2020. The current prices paid index held steady at 25.5.
The survey indicated manufacturers increased headcount in October, after falling in the prior two months. The hiring outlook also improved.
Despite the decline in the current conditions gauge, New York factories remain somewhat optimistic about the future. Looking out six months, measures of new orders and shipments remained in expansionary territory.
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