The New York Federal Reserve’s index of manufacturing conditions deteriorated unexpectedly in August, official data showed on Thursday.
In a report, the Federal Reserve Bank of New York said that its general business conditions index fell to 8.2 in August from a reading of 9.5 in July. Analysts had expected the index to rise to 10.0 in August. On the index, a reading above 0.0 indicates improving conditions, below indicates worsening conditions.
The new orders index slipped four points to 0.3 and the shipments index fell seven points to 1.5, suggesting that both orders and shipments were flat. On the plus side Labor market conditions slightly improved, with the index for number of employees climbing eight points to 10.8 and the average workweek index rising twelve points to 4.8.
Indexes for the six-month outlook generally pointed to strong optimism about future business activity; the future general business conditions index rose five points to 37.4, its highest level in more than a year.
In response to a series of supplementary questions, manufacturers predicted that overall sales or revenues would be higher in 2013 than in 2012; employment levels and capital spending were expected to be little changed from last year and more respondents reported that they had scaled back than raised their sales expectations for 2013 from what they had anticipated at the beginning of the year.
Hiring and capital spending plans for 2013 were only slightly less positive than at the beginning of the year. For more details, see the full supplemental report.