The Empire State Index stands at 43 points, 25.6 points higher than in June, the largest increase in a month.
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Manufacturing activity in New York State grew at a record pace in July, driven by strong demand, which improved the employment situation but also pushed up selling prices at an unprecedented rate.
The index measuring general business conditions stood at 43 points, 25.6 points more than in June, which represents the largest increase recorded over a month, according to the Empire State monthly indicator released on Thursday by the American Central Bank (Fed).
This sharp increase surprised analysts, who expected a weak increase, and saw the index settle at 18 points.
When this index is greater than 0, it means that the activity is growing. If it increases compared to the previous month, it means that the rate of progress is faster, and if it decreases, it means that it is growing over a month, but at a slower pace.
“New orders and deliveries have increased sharply,” said the Fed in the press release, stressing that “delivery times have continued to lengthen significantly” and that “employment has increased strongly”.
And inflation, which is now at its highest for 13 years in the United States, is also clearly visible, since the price of raw materials and spare parts purchased by manufacturers are rising sharply. and most importantly, “selling prices have increased at the fastest rate on record.”
In the Philadelphia region, on the other hand, the growth in manufacturing activity was less strong in July than in June, the index also released Thursday by the Philadelphia Fed fell to 21.9 points against 30.7 last month, a steeper drop than expected.
Measured in a highly industrialized region in the northeast of the United States, this leading indicator is considered a good barometer of the evolution of the American economy.
In this region, located just south of New York, “companies continue to report pressure on prices”, less strong however than in June.
The index measuring the prices paid by manufacturers to their suppliers fell by 11 points, after reaching a 42-year high in June.
Inflation has reached a level not seen since 2008, + 3.9% over one year in May according to the PCE index followed by the Fed, + 5.4% in June according to the CPI index.
But Fed Chairman Jerome Powell said again on Wednesday that the rise in prices should only be strong for a few months, before slowing down and stabilizing around 2%.
The Fed also refers in this report to the optimism of companies surveyed about improving conditions over the next six months, as the future employment index also hits a new record.
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