After reporting a notable slowdown in the pace of growth in regional manufacturing activity in the previous month, the Federal Reserve Bank of New York released a report on Tuesday showing an unexpected rebound in the pace of growth in May.
The New York Fed said its general business conditions index jumped to 20.1 in May from 15.8 in April, with a positive reading indicating growth in regional manufacturing activity. Economists had expected the index to edge down to 15.0.
The unexpected increase by the headline index was partly due to a significantly faster rate of growth in new orders, as the new orders index surged up to 16.0 in May from 9.0 in April.
The number of employees index also climbed to 8.7 in April from 6.0 in May, and the shipments index edged up to 19.1 from 17.5.
The report also said the prices paid index increased to 54.0 in May from 47.4 in April, while the prices received index rose to 23.0 from 20.7.
Looking ahead, the New York Fed said optimism about the six-month outlook increased but fell short of levels enjoyed in recent months.
The index for future business conditions, which plunged to 18.3 in April after remaining above 40 for most of the past year and a half, rebounded to 31.1 in May.
On Thursday, the Philadelphia Federal Reserve is scheduled to release its report on regional manufacturing activity in the month of May.
The Philly Fed Index is expected to dip to 21.7 in May after unexpectedly inching up to 23.2 in April, with a positive reading indicating growth.