The Empire State Manufacturing index surged to 27.5 in September, the highest level since October 2009.
This was up from 14.69 in August, and it crushed economists' expectations for 15.95.
"The September 2014 Empire State Manufacturing Survey indicates that business activity expanded at a robust pace for New York manufacturers," the NY Fed said in its report. "Optimism about future business conditions remained high."
"The buoyant headline index is based on a general question of business conditions," Capital Economics' Paul Diggle noted. "The more specific sub-indices that are derived from actual activity were a bit weaker.
Here's the NY Fed on the reports sub-indices: "The new orders index moved up three points to 16.9, and the shipments index advanced two points to 27.1. The unfilled orders index fell three points to -10.9. The prices paid index declined three points to 23.9, indicating a slower pace of input price increases, while the prices received index climbed nine points to 17.4, suggesting a pickup in the pace of selling price increases. Employment indexes showed a slight increase in employ- ment levels and hours worked. Indexes for the six-month outlook conveyed a high degree of optimism about future business conditions."
"The manufacturing sector clearly is in good shape, but we doubt it is as strong as this survey seems to suggest, at least at the headline level," Pantheon Macroeconomics' Ian Shepherdson said. "We wonder if the Empire State is suffering from seasonal adjustment distortions similar to those boosting the ISM and Philly surveys."
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