New York manufacturing activity unexpectedly showed a significant turnaround in the month of November, according to a report released by the Federal Reserve Bank of New York on Wednesday.
The New York Fed said its general business conditions index surged to a positive 9.1 in November from a negative 4.6 in October, with a positive reading indicating growth. Economists had expected the index to rise to a negative 2.8.
The unexpected spike by the headline index partly reflected an acceleration in the pace of growth in shipments, as the shipments index jumped to 10.0 in November from 1.4 in October.
Meanwhile, the new orders index edged down to a negative 4.9 in November from a negative 4.2 percent in October, indicating a slightly faster pace of contraction.
The report also showed a downturn in employment, with the number of employees index slumping to a negative 4.5 in November from a positive 3.1 in October.
With regard to inflation, the prices paid index fell to 22.2 in November from 25.5 in October, while the prices received index slipped to 11.1 from 11.7.
Looking ahead, the New York Fed said firms became much less sanguine about the outlook, with the index for future business conditions plunging to a negative 0.9 in November from a positive 23.1 in October.
The index tumbled to its lowest level in nearly a year, as only 29 percent of respondents expect conditions to be better in six months.
On Thursday, the Philadelphia Federal Reserve is scheduled to release its report on regional manufacturing activity in November. The Philly Fed Index is expected to come in unchanged at negative 9.0.