New York state's manufacturing sector unexpectedly shrank this month, but business optimism remained relatively resilient, a report from the New York Federal Reserve showed on Friday.
The New York Fed's "Empire State'' general business conditions index contracted to minus 2.21 from 1.52 in October. Economists in a Reuters poll had forecast an index of 5.00. A reading above zero indicates expansion. Friday's was the first negative reading since May.
The report underscores some of the headwinds facing the world's largest economy, where the recovery remains fragile. A federal government shutdown in October had been expected to drag on growth, but data in the wake of that congressional impasse has been mixed.
The new orders index slid to minus 5.53 from 7.75, and shipments dropped to minus 0.53 from 13.12. Labor market conditions also weakened, with the index for the number of employees slipping to 0.0 from 3.61 in October.
The average employee workweek index also sank to minus 5.26 from 3.61.
Nevertheless, the New York Fed noted that firms remained relatively optimistic in November, following on a buoyant outlook in October. The index of six-month business conditions edged down to 37.51 from 40.76.
The survey of manufacturing plants in the state is one of the earliest monthly guideposts to U.S. factory conditions.