Manufacturing Index Up Sharply

The New York Federal Reserve Bank released its monthly Empire State Manufacturing Index this morning, and the strength of the reading surprised economists who had been expecting a more modest increase. The index rose to 13.5 in January from a revised reading of 8.2 in December. The consensus estimate had been for a rise to 10.5.

The biggest gain came from selling prices, which rose 20 points in January, to 23.1. New orders rose to 13.7, up 8 points, and the shipments index rose slightly to 21.7. The future general business conditions index rose 9 points, to 54.9, its highest reading since last January.

Even better economic news came on the employment front, where 51% of employers indicated that they expect to hire more workers in the next 6-12 months. About 80% of employers expected wages to grow by 5%, and the remaining 20% expect wages to stay about the same. About 37% of employers expect benefit increases of more than 5%.