According to duel reports released Thursday, both New York and Philly manufacturing data increased sharply in the month of May after April disappointed.
The New York Fed’s Empire State index rocketed to 19.01 in May, up significantly from 1.29 in April. April was a huge disappointment, showing growth slowed from 5.61 in the month of March.
The report said it was the highest reading since mid-2010, and was way above expectations. Economists polled by The Wall Street Journal had expected the latest index to increase to just 5.0. A reading above 0 indicates expansion, while below indicates contraction.
The New York Fed survey is the first monthly factory report released by regional Fed banks. The Philadelphia Fed’s gauge of manufacturing activity in the mid-Atlantic region, which was released shortly after, also rose to 15.4 in May from 16.6 the month prior. The May reading surpassed Wall Street’s expectations of 14. Economists expected the Philly survey would show expanding activity in May, but only at slightly slower rate than in April.
According to the New York Fed report, “business conditions improved significantly for New York manufacturers.”
The New York Fed said new demand is reviving. The new orders index rebounded to 10.44, after falling to -2.77 in April.
The shipments index shot up to 17.44 from 3.15 in April and 3.97 in March.
Demand for labor also increased, with the employment index increasing to 20.88 this month from 8.16 in April, and the workweek index edged up to 2.20 from 2.04 in April.
The prices-received index slowed to 6.59 after it increased to 10.20 in April from 2.35 in March. The prices paid index slowed to 19.78 from 22.45 in April and 21.28 in March.
The general business conditions expectations index for the next six months increased to 43.96 from 38.23 last month. The employee expectations index slowed to 17.58 from 22.45.