Empire State index jumps in August, but some economists sceptical

Factory sector activity in the Federal Reserve bank of New York's jurisdiction accelerated noticeably in August, the results of a survey conducted by its staff revealed.

The so-called 'Empire State' index shot higher from a reading of 9.8 points for July to 25.2 for the current month - its best reading since September 2014.

In parallel, a sub-index linked to new orders in the region's manufacturing sector advanced by 7.3 points to 20.6, while another referencing shipments edged up by 1.9 points to 12.4.

Meanwhile, a sub-index tracking the number of employees at firms increased by 2.3 points to 6.2, alongside a 10.9 point jump in the sub-index linked to the length of the average workweek.

Commenting on Tuesday's reading, Ian Shepherdson, chief economist at Pantheon Macroeconomics said: "The subindexes aren't as strong as the headline, though orders, employment and the workweek all rose sharply. The survey is much more erratic than the national ISM index, even when we look at the components rather than the headline sentiment index, but these are encouraging numbers. We still expect the manufacturing recovery gradually to lose momentum over the course of the second half, but for now the Empire State survey appears to point to the ISM index rising slightly to a very strong 57, from 56.3 in July."