New York manufacturers reported a strong pickup in activity this month, after a very weak April, according to data released Thursday. The data support the view of a rebounding economy this quarter.
The Empire State's business conditions index increased to 19.01 in May after it slowed to 1.29 in April from 5.61 in March, according to the Federal Reserve Bank of New York's Empire State Manufacturing Survey.
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The report said it was the highest reading since mid-2010. A reading above 0 indicates expansion.
Economists surveyed by The Wall Street Journal had expected the latest index to increase, but only to 5.0.
The New York Fed survey is the first monthly factory report released by regional Fed banks. The Philadelphia Fed is scheduled to release its regional report later Thursday. Economists think the Philly survey will show expanding activity in May but at a slightly slower rate than in April.
According to the New York Fed report, "business conditions improved significantly for New York manufacturers."
The New York Fed said new demand is reviving. The new orders index rebounded to 10.44, after falling to -2.77 in April.
The shipments index jumped to 17.44 from 3.15 in April and 3.97 in March.
Demand for labor also increased. The employment index rose to 20.88 this month from 8.16 in April, and the workweek index edged up to 2.20 from 2.04 in April.
The prices-received index slowed to 6.59 after it jumped to 10.20 in April from 2.35 in March. The prices paid index eased to 19.78 from 22.45 in April and 21.28 in March.
New York manufacturers are also more confident about the future.
The general business conditions expectations index for the next six months increased to 43.96 from 38.23 last month. The employee expectations index slowed to 17.58 from 22.45.
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.