The numbers: The New York Fed’s Empire State business conditions index, a gauge of manufacturing activity in the state, rose 12.3 points to 11.1 in July, the regional Fed bank said Friday.
Economists had expected a third straight negative reading, according to a survey by The Wall Street Journal.
Any reading above zero indicates improving conditions.
Key details: There was one major gloomy note. Firms turned pessimistic about the next six months as the index of future activity declined a sharp 20 points to negative 6.2. It is rare for manufacturers to sour sharply on the outlook.
On the positive side, price pressures, while still elevated, decelerated in July.
The new-orders index inched up 0.9 points to 6.2 in July, and the shipments index surged 21.3 points to 25.3.
Unfilled orders points dropped 0.9 points to negative 5.2 while delivery times lengthened at the slowest pace in months. Inventories picked up.
Big picture: Economists use the Empire State index and other regional manufacturing gauges, to get an early read on factory activity.
In June, the ISM national manufacturing index fell to a two-year low of 53.5 as new orders contracted for the first time since May 2020. The July reading will be released early next month.
Economists say the post-pandemic restocking cycle is winding down. Further declines in orders could lead to cutbacks in activity in the factory sectors.