(Bloomberg) -- New York state factory activity unexpectedly expanded for the first time in nearly a year as orders and shipments strengthened.
The Federal Reserve Bank of New York’s September general business conditions index rose 16.2 points to 11.5, exceeding all estimates in a Bloomberg survey of economists. Readings above zero indicate growth.
A measure of new orders jumped more than 17 points to 9.4, the highest since April 2023, while a gauge of shipments surged to a more than one-year high.
At the same time, a measure of employment showed an 11th straight month of contraction, while an index of hours worked expanded at a modest pace.
Fed policymakers, who will likely cut interest rates after their two-day meeting on Wednesday, see a cooling job market as a greater risk to the economy as inflationary pressures abate.
The Empire State data have been subject to wide swings on a monthly basis for more than two years. A broader gauge of manufacturing across the US has been stuck in contraction territory for all but one month since October 2022 amid high borrowing costs, restrained business investment and uneven consumer spending.
The New York Fed’s gauge of prices paid for materials was little changed, while an index of prices received by state manufacturers fell 1.1 points to 7.4 this month.
Meanwhile, the six-month outlook for overall activity increased to the highest level since March 2022, a sign the state’s producers are more upbeat about the economy’s prospects. The outlook for both orders and shipments strengthened.
(Corrects to show readings above zero, rather than 50, indicate growth)
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