NY Fed's Sep Mfg Index 14.70 Vs 25.06 In Aug

NEW YORK (Dow Jones)--Manufacturing activity in the New York Federal Reserve district decreased in September, with the overall index slipping to a reading of 14.70 from an unrevised 25.06 in August.

Among the economists who forecast this index, the median expectation of 11 economists surveyed by Dow Jones Newswires was for a reading of 18.00.

The Bank said Monday in its Empire State Manufacturing Survey that "conditions for New York manufacturers continued to improve in September, but at a slower pace than in the past few months." A positive reading indicates an improving manufacturing sector.

The September reading for the new orders index decreased to 13.56 compared with 22.21 in August, while the shipments index eased sharply to 5.09 from 28.82.

The unfilled orders index moved down into negative territory with a reading of -2.13 compared with a positive reading of 1.08 in August. Inventories, meanwhile, moved into positive territory with a reading of 3.19 from a negative reading of -2.15 in August.

The prices paid index edged higher to a reading of 35.11 in September from 34.41, while the prices received index increased to a reading of 11.70 from 3.23 in August. The fact that prices paid is higher than prices received shows that manufacturers are still having trouble fully passing on the higher costs that they confront.

The employment indexes were mixed. The number of employees increased to a reading of 18.22 from 11.62, while the average employee workweek decreased to a reading of 9.57 from 16.13 in August.

The index only began to be compiled in July 2001, but has gained market attention as a precursor of the Philadelphia Fed's manufacturing index (due to be released at 12 p.m. EDT on Thursday), which is itself seen as a proxy for the Institute for Supply Management's national manufacturing survey. On an ISM-equivalent basis the September Empire state index equaled a reading of 54.9, just a bit higher than the actual ISM reading of 52.9 in August.

The index measuring expectations six months from now slipped to a reading of 48.80 from 50.40 in August.