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Empire State manufacturing index hits 8-month high in March

The numbers: The Empire State Manufacturing Index rose to a reading of 17.4 in March from 12.1 in the prior month, the New York Fed said Monday. Economists surveyed by the Wall Street Journal expected a reading of 15.

This is the highest level of the index since last July and the ninth consecutive reading above zero, which indicates an expansion of activity.

What happened: The new orders index slipped 1.7 points to 9.1 in March, while shipments jumped 17.1 points to 21.1, a post-pandemic high. Unfilled orders rose 1.4 points to 4.

The prices paid index rose 6.6 points to 64.4 in March, the second month in a row for hitting a 10-year high.

Prices received rose 0.8 points to 24.2, a two-year high.

Expectations for business in the next six months rose 1.5 points to 36.4 in March. The index for future employment rose to its highest level in 10 years, suggesting firms widely expect to add workers in coming months. Both the future prices paid and prices received indexes continued to move higher.

Big picture: The Empire State index gets market attention because it is seen as a leading indicator of national manufacturing trends. In February, the Institute of Supply Management’s manufacturing index, seen as the best gauge of factory activity across the country, climbed to 60.8%, its ninth consecutive month of growth and the fastest pace since the pandemic.

Economists expect the factory sector to keep humming along as the drag from COVID-19 fades, although there are some supply disruptions causing bottlenecks and higher prices.

Market reaction: Stock-index futures pointed to a modestly higher start on Monday after the Dow Jones Industrial Average
DJIA,
+0.03%

and S&P 500 index
SPX,
-0.14%

set record highs last week.

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