July 16, 2012 / 12:43 PM / 6 years ago

NY Fed manufacturing growth picks up in July

NEW YORK (Reuters) - A gauge of manufacturing in New York state perked up in July after a sharp drop off the month before, but new orders shrank, the New York Federal Reserve said in a report on Monday.

The New York Fed’s “Empire State” general business conditions index rose to 7.39 from 2.29 in June, topping economists’ expectations for 4.00.

Forward-looking new orders contracted to minus 2.69, the lowest level since September 2011, from 2.18. Employment gauges were mixed, with the index for the number of employees rising to 18.52 from 12.37 and the average employee workweek index falling to zero from 3.09.

U.S. stock index futures briefly added to losses shortly after the data as investors also took in a report that showed retail sales unexpectedly fell last month. Treasuries prices extended gains and the dollar added to losses against the yen.

The survey of manufacturing plants in the state is one of the earliest monthly guideposts to U.S. factory conditions.

After being a tent pole of the U.S. economic recovery, manufacturing has shown signs of wavering and the larger national report from the Institute for Supply Management showed the sector shrank last month.

The New York report generally moves in the same direction as ISM’s, though it is more volatile.

Manufacturing has also been faltering in Europe and Asia as the euro zone debt crisis takes its toll.

A sharp drop in prices paid suggested input costs continued to ease. The index tumbled to its lowest level since June 2009 at 7.41 from 19.59.

Businesses’ view of the coming months also eroded with the index of business conditions six months ahead slipping to its lowest level since October 2011 at 20.20 from 23.13.

The employment gauge for the next six months dropped to 6.17 from 16.49.

Reporting by Leah Schnurr; Editing by Chizu Nomiyama

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