Washington, DC, June 15, 2006--Manufacturing activity in the New York area surged unexpectedly in June, the New York Federal Reserve Bank said Thursday.
The banks' Empire State Manufacturing index rose to 29.0 points in June from a revised 12.9 in May. The index had moderated over the past two months.
The rise was well above expectations. Economists had forecast the Empire State index would basically hold steady at 12.5 in June from the initial estimate of 12.4 in May.
Readings over zero indicate expansion.
The Empire State index is of interest to traders primarily because it's seen as an early forecast of the national Institute for Supply management survey due out in two weeks. In May, the ISM factory gauge fell to 54.4%, its lowest level since August.
New orders jumped to 25.8 points in June from 16.2 in May.
The indexes for shipments and unfilled orders also jumped higher. Inflation indexes strengthened.
The prices-paid index rose to 52.9 points in June from 43.1 in May.
Despite the increased activity, the factory job market weakened for the third straight month, with the employee index falling to 5.1 points in June from 9.7 in May. The average workweek index rose to 11.3 points from 9.4.
The index of activity in the next six months showed continued optimism. The future general business condition index rose to 33.7 in June from 30.2 in May.
Inflation expectations also rose in June to 62.5 from 59.4 in the previous month.
