New York Manufacturing Grows Unexpectedly

New York, NY, Aug. 15, 2008--Manufacturing in New York unexpectedly grew in August as the cost of raw materials fell.

The Federal Reserve Bank of New York's general economic index rose to 2.8, the highest level since January, from minus 4.9 a month earlier, the bank said. A reading of zero is the dividing line between growth and contraction.

Energy and other commodities prices have slid in the past month, helping ease companies' cost pressures, while demand from abroad continues to help U.S. manufacturers as domestic spending slows. The so-called Empire State index's measure of prices paid dropped by the most in more than two years.

Economists forecast the index would be little changed, rising to minus 4 this month.