March 15, 2011 / 1:18 PM / 8 years ago

RPT-WRAPUP 2-NY manufacturing, employment rise but so do prices

  (Repeats to additional subscribers)
 * New York state manufacturing at 9-month high in March
 * Import prices rise for 5th month in February
 * FOMC statement on tap after 2:15 p.m. (18:15 GMT)
 (Adds NAHB, quote, market movement, byline)
 By Leah Schnurr
 NEW YORK, March 15 (Reuters) - Manufacturing in New York
state rose in March to a nine-month high, while prices paid
also accelerated in another sign inflation is starting to
build.
 The New York Federal Reserve on Tuesday said its "Empire
State" general business conditions index rose to 17.50 from
15.43 in February, topping a Reuters forecast of 17.00. It was
the highest level since June 2010.
 But the new orders and shipments indexes both declined,
suggesting there was some underlying weakness.
 "Manufacturing is running strong right now, but we may be
turning the corner, given the moderation in Asia, especially
China," said Yelena Shulyatyeva, U.S. economist at BNP Paribas
in New York.
 "New orders have moderated quite a lot. It's sending a
weaker signal about manufacturing than what the headline number
suggests."
 The new orders index fell to 5.81 from 11.80, while
shipments declined to 1.62 from 11.31.
 The prices paid index rose to 53.25, the highest level
since August 2008, from 45.78. Prices received also rose as
manufacturers passed along costs.
 <^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^
 Graphic-US homebuilder sentiment:
 r.reuters.com/fep58r
 Graphic-US export, import prices:
 r.reuters.com/vyn58r
 Graphic - Foreign holders of US Treasuries:
 r.reuters.com/tap58r
 Breakingviews: Global investors vulnerable as Japan fears
 worsen [ID:nLDE72E0SH]
 ^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^>
 In a positive sign, employment gauges expanded. The index
for the number of employees rose to 9.09 from 3.61 in February,
and the average employee workweek index was up at 15.58 from
6.02.
 The index of business conditions six months ahead was
little changed at 49.35 from 49.4 in February. The survey of
manufacturing plants in the state is one of the earliest
monthly guideposts to U.S. factory conditions.
 Chris Low, chief economist at FTN Financial, said the
Empire State index is more volatile than the national report
from the Institute for Supply Management and the regional
figures from Chicago and Philadelphia, especially given the
rough weather conditions in January and February.
 "The survey suggests a pickup in hiring in March but a
slowdown in the leading components of the index, which may lead
to a slowdown down the road. In the meantime, price pressures
are evident, but it is not yet translating into efforts to
control payroll costs," according to Low.
 PRICES IN PLAY
 A separate report showed U.S. import prices rose for the
fifth consecutive month in February as political turmoil in the
Middle East helped pushed oil prices higher. For details, see
[ID:nN15228403]
 With rising gasoline prices, inflation pressure will remain
high for the next several months, according to Wells Fargo
analysts.
 Inflation concerns recently have come to the forefront on
worries that rising energy and commodity prices could temper
the economic recovery.
 Investors will get another look at the potential for
inflation later in the week with reports on producer and
consumer prices. Producer prices are expected to rise for an
eighth month, though the index is likely to have slowed from
January, while the core consumer price measure is expected to
slow.  For a preview see [ID:nN1493221]
 U.S. homebuilder sentiment in March ticked up to its
highest level since May 2010 after stagnating at the same level
for four months but was still well below levels regarded as
healthy, a survey released on Tuesday showed. [ID:nDYE7DH01T]
 The data releases were largely ignored by financial markets
where investors remained focused on the fallout from the
natural disaster and nuclear crisis in Japan.
 Investors will also be watching a statement from the
Federal Reserve later on Tuesday for any comments on the impact
to the global outlook from the events around the world. The
central bank looks set to hold monetary policy steady and will
likely nod to recent improvement in the economy. For a preview,
see [ID:nN1495951]
 (Additional reporting by Richard Leong in New York and Doug
Palmer in Washington; Editing by Padraic Cassidy)


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