A report released by the Federal Reserve Bank of New York on Thursday showed regional manufacturing activity has contracted at a substantially slower rate in the month of February.
The New York Fed said its general business conditions index skyrocketed to a negative 2.4 in February from a negative 43.7 in January, although a negative reading still indicates contraction. Economists had expected the index to surge to a negative 15.0.
The sharp increase by the headline index was partly due to a substantial turnaround by shipments, with the shipments index spiking to a positive 2.8 in February from a negative 31.3 in January.
The report also showed new orders contracted at a significantly slower rate, as the new orders index soared to a negative 6.3 in February from a negative 49.4 in January.
The number of employees index also climbed to a negative 0.2 in February from a negative 6.9 in January, suggesting employment levels were little changed.
On the inflation front, the prices paid index jumped to 33.0 in February from 23.2 in January, while the prices received index advanced to 17.0 from 9.5.
The index for future business conditions also rose to 21.5 in February from 18.8 in January, indicating firms expect activity to grow over the next six months.
A separate report released by the Philadelphia Federal Reserve on Thursday showed a substantial turnaround in regional manufacturing activity in the month of February.
The Philly Fed said its diffusion index for current general activity surged to a positive 5.2 in February from a negative 10.6 in January, with a positive reading indicating growth. Economists had expected the index to rise to a negative 8.0.
With the much bigger than expected increase, the Philly Fed Index returned to positive territory for the first time since August.
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