Manufacturing in New York state rose in March to a nine-month high, while prices paid also accelerated in another sign inflation is starting to build. The New York Federal Reserve on Tuesday said its "Empire State" general business conditions index rose to 17.50 from 15.43 in February, topping a Reuters forecast of 17.00. It was the highest level since June 2010. But the new orders and shipments indexes both declined, suggesting there was some underlying weakness.
"Manufacturing is running strong right now, but we may be turning the corner, given the moderation in Asia, especially China," said Yelena Shulyatyeva, US economist at BNP Paribas in New York. The new orders index fell to 5.81 from 11.80, while shipments declined to 1.62 from 11.31. The prices paid index rose to 53.25, the highest level since August 2008, from 45.78. Prices received also rose as manufacturers passed along costs.
In a positive sign, employment gauges expanded. The index for the number of employees rose to 9.09 from 3.61 in February, and the average employee workweek index was up at 15.58 from 6.02.