The Federal Reserve Bank of New York released a report on Wednesday unexpectedly showing a modest acceleration in the pace of growth in regional manufacturing activity in the month of December.
The New York Fed said its general business conditions index inched up to 31.9 in December from 30.9 in November, with a positive reading indicating growth. The uptick surprised economists, who had expected the index to pull back to 20.5.
The unexpected increase by the headline index came despite modest slowdowns in the pace of growth in new orders and shipments.
The new orders index dipped to 27.1 in December from 28.8 in November, while the shipments index slipped to 27.1 from 28.2. The New York Fed noted the readings still point to another month of strong growth in both areas.
The report showed the number of employees also slid to 21.4 in December from 26.0 in November, indicating a slowdown in the pace of job growth.
Meanwhile, the unfilled orders index climbed to 19.0 in December from 12.7 in November, as firms had more unfilled orders.
The New York Fed said the delivery times index tumbled to 23.1 in December from 32.2 in November, suggesting delivery times lengthened significantly but less so than last month.
The report also showed the prices paid index fell to 80.2 in December from 83.0 in November, while the prices received index dropped to 44.6 from 50.8.
Looking ahead, firms remained optimistic that conditions would improve over the next six months, with the index for future business conditions nearly unchanged at 36.4 in December compared to 36.9 in November.
The New York Fed said longer delivery times, higher prices, and increases in employment are all expected in the months ahead.
On Thursday, the Philadelphia Federal Reserve is scheduled to release its report on regional manufacturing activity in December. The Philly Fed Index is expected to slump to 30.0 in December from 39.0 in November.
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