New York business conditions softened significantly this month, continuing a seesaw pattern in how manufacturers view the economy, according to data released Wednesday by the Federal Reserve Bank of New York.
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The Empire State's business conditions index fell to 6.17 in October from 27.54 in September, which was the highest reading since late 2009. The numbers follow a reading of 14.69 in August and a jump to 25.60 in July.
Economists surveyed by The Wall Street Journal had expected the latest index to slow, but only to 20. A reading above zero indicates expansion.
"The pace of growth slowed significantly from last month," the report said.
The New York Fed subindexes, outside of jobs, fell steeply as well.
The new orders index plunged to -1.73 from 16.86 in September. The shipments index dropped to 1.12 from a multi-year high of 27.08 last month.
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The employment index, however, bounced back to 10.23 after it plunged in September to 3.26 from August's 13.64 reading. The workweek index contracted to -1.14 from 3.26.
Both price measures slowed this month, "a sign that the pace of growth had moderated for input prices and selling prices," the New York Fed said.
The prices-received index declined to 6.82 from 17.39 in September. The prices-paid index dropped to 11.36 from 23.91.
"Most of the indexes assessing the future outlook were down from last month," the report said. "Nevertheless, they remained fairly high by historical standards, and conveyed an expectation that activity would continue to grow in the months ahead."
The general business-conditions expectations index for the next six months remained at an elevated level, at 41.66 in October, versus 46.72 in September and 46.76 in August.
New-orders expectations slipped to 42.34 from 45.56. The employee-expectations index dropped to 12.50 from 14.13 in September.
The New York Fed survey is the first monthly factory report released by regional Fed banks. The Philadelphia Fed will release its survey Thursday.
Economists use the Fed surveys as guideposts to forecast the health of the national industrial sector as captured in the monthly manufacturing report done by the Institute for Supply Management.
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