NY state factories nearly out of slump in July
NEW YORK (Reuters) - The slumping factory sector in New York state nearly pulled out of contraction in July, posting the highest reading in more than a year as new orders surged, the New York Federal Reserve said on Wednesday.
The New York Fed's "Empire State" general business conditions index rose to minus 0.55 in July from minus 9.41 in June.
July's result was the strongest since April 2008's reading of 0.81, which was the last time it was in positive territory. It also exceeded economists' expectations of minus 5.0, based on the median of forecasts in a Reuters poll.
"The number was a decent number, showing that in the New York region, manufacturing was only slightly contracting in July," said Gary Thayer, senior economist at Wells Fargo Advisors in St. Louis.
"We saw some positive numbers on orders and shipments, the first we had seen in a long time, which suggests that maybe the manufacturing sector is turning a corner. It's still a tentative sign, but consistent with other reports showing that the recession may be near an end."
On Wall Street, stock index futures added to their gains after the data, which coincided with a report showing a slightly faster-than-expected monthly rise in U.S. consumer prices.
Government bonds, which generally perform better during times of economic weakness, added to their losses.
The New York Fed's new orders index jumped to 5.89 in July from June's minus 8.15, reaching its highest since December 2007.
The improvement came as the inventories index fell to minus 36.46 -- a record low, according to the New York Fed. In June it was at minus 25.29.
Economists have expected plummeting inventories to lead to a rebound in production and possibly help pull the U.S. economy out of the worst recession in decades.
Concerning inflation, the July survey showed the prices paid index jumped to 10.42 from minus 5.75, hitting their highest since November 2008.
The Empire State index was launched in July 2001.
The survey of manufacturing plants in the state is one of the earliest monthly guideposts to U.S. factory conditions.
(Additional Reporting by Ellen Freilich; Editing by Padraic Cassidy)
