A report released by the Federal Reserve Bank of New York on Tuesday showed a turnaround by regional manufacturing activity in the month of February.

The New York Fed said its general business conditions index jumped to a positive 5.7 in February after slumping to a negative 12.6 in January, with a positive reading indicating growth. Economists had expected the index to climb to a negative 1.0.

The bigger than expected rebound by the headline index partly reflected a sharp increase by the new orders index, which spiked to a positive 11.4 in February from a negative 8.6 in January.

The report also showed a substantial turnaround by shipments, as the shipments index surged to a positive 14.2 in February from a negative 1.7 in January.

Meanwhile, the number of employees index slid to a negative 3.6 in February from a positive 1.2 in January, suggesting employment levels moved somewhat lower.

The New York Fed also said optimism about the outlook for conditions over the next six months dropped significantly, with the index for future business activity slumping to 22.2 in February from 36.7 in January.

On the inflation front, the prices paid index shot up to 40.2 in February from 29.1 in January, reaching its highest level in nearly two years. The prices received index also jumped to 19.6 in February from 9.3 in January.

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