On Thursday, a publication from the Federal Reserve Bank of New York revealed that this February has seen a significantly slower contraction in regional manufacturing activity compared to previous rates.
The New York Fed's business conditions index soared from -43.7 in January to -2.4 in February, still indicating a contraction, but at a much slower pace. This exceeded economists' expectations, who had predicted the index to rise only to -15.0.
The index's sharp rise is partly attributed to a major turnaround in shipments. The shipments index spiked to a positive 2.8 in February, up from a -31.3 in January.
The report also outlined that the rate of contracting new orders has slowed considerably, as the new orders index ascended to -6.3 in February from -49.4 in January.
In terms of employment, the number of employees index similarly climbed from -6.9 in January to -0.2 in February, implying little change in employment levels.
Regarding inflation, the prices paid index inched up from 23.2 in January to 33.0 in February, while the prices received index also saw an upward movement to 17.0, up from the previous month's 9.5.
The future business conditions index also rose from 18.8 in January to 21.5 in February, showing that firms are optimistic about the growth of activity over the forthcoming six months.
On the same day, the Philadelphia Federal Reserve also published a report showing a significant turnaround in regional manufacturing activity for the month of February. The Philly Fed's index noted an upswing from -10.6 in January to a positive 5.2 in February, a positive indicator for growth and contrary to economists' forecast of the index rising to -8.0.
With this unexpected surge, the Philly Fed Index returned to positive territory for the first time since the previous August.
