Business activity in the New York manufacturing sector saw substantially slower growth in the month of December, according to a report released by the Federal Reserve Bank of New York on Monday.
The New York Fed said its general business conditions index plunged to 10.9 in December after rising to 23.3 in November.
While a positive reading still indicates growth in regional manufacturing activity, economists had expected the index to dip to 20.0.
With the much bigger than expected decrease, the index dropped to its lowest level since hitting 3.0 in May of 2017.
The steep drop by the headline index was partly due to a notable slowdown in the pace of shipment growth, as the shipments index tumbled to 21.0 in December from 28.0 in November.
The new orders index also slumped to 14.5 in December from 20.4 in November, indicating a notable slowdown in growth.
The report also said the prices paid index dropped to 39.7 in December from 44.5 in November, while the prices received index edged down to 12.8 from 13.1.
Meanwhile, the number of employees index jumped to 26.1 in December from 14.1 in November, pointing to a significant acceleration in the pace of job growth.
The New York Fed said firms were slightly less optimistic about the six-month outlook, with the index for future business conditions falling to 30.6 in December from 33.6 in November.
On Thursday, the Philadelphia Federal Reserve is scheduled to release its report on regional manufacturing activity in the month of December.
The Philly Fed Index is expected to slip to 12.0 in December after plunging to 12.9 in November, although a positive reading would still indicate growth.
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