NEW YORK, Jan 15 (Reuters) - Manufacturing in New York state contracted for a sixth straight month in January, pressured by a fall in new orders and shipments of goods, the New York Federal Reserve said in a report on Tuesday.
The continued contraction in the sector comes as the New York region struggles to shake off the effects of storm Sandy that pounded the U.S. Northeast at the end of October, hitting consumers and businesses.
The New York Fed's "Empire State" general business conditions index fell to -7.8 from a revised -7.3 the month before. The contraction came as a surprise, with economists polled by Reuters expecting a flat reading.
"New York state is struggling to get back on its feet after Hurricane Sandy," said Hugh Johnson, chief investment officer of Hugh Johnson Advisors in Albany, New York.
"The fact we've had a slow recovery from Hurricane Sandy is not a surprise to me or anybody who lives in the state. So that is one that is an outlier and you can set it aside."
U.S. stock index futures continued to trade lower after the data but trimmed losses as a separate report showed U.S. retail sales rose more than expected in December as Americans shrugged off the threat of higher taxes.
S&P 500 futures were down 6.2 points with investors fretting about the debate brewing in Washington over raising the U.S. borrowing limit as well as what is expected to be a lackluster earnings season.
The Empire State report's new orders index fell to -7.2 from -3.4, while shipments fell even more sharply, dropping to -3.1 from 11.9 the month before.
Employment gauges remained contractionary but were better than the month before. The index for the number of employees was at -4.3 compared to -9.7 and the average employee workweek index was at -5.4 compared to -10.8.
Meanwhile the prices paid index hit its highest since May, rising to 22.6 in January compared to 16.1 the month before.
The outlook for half a year ahead was more buoyant. The index of business conditions six months ahead rose to 22.4 in January from 17.95 in December, hitting its highest since September.
The survey of manufacturing plants in the state is one of the earliest monthly guideposts to U.S. factory conditions.