Manufacturing activity in the New York Federal Reserve (search) district was little changed in August, with the overall index holding close to its high level recorded in the prior month with a fresh reading of 23.04, compared with 23.91 in July.

The index had temporarily dipped into negative territory in May, the first such reading after 25 months of positive readings. A positive reading indicates that the economy is expanding, while a negative reading indicates contraction.

Among the economists who forecast this index, the median expectation of 13 economists surveyed by Dow Jones Newswires was for a reading of 17.0.

The August reading for the new orders index (search) surged to 33.75 from 19.15 in July, while the shipments index increased to 23.87 from 20.91.

The unfilled orders index (search) increased to 7.20 from 2.86. Inventories, however, remained in negative territory with a reading of negative 1.00 compared with negative 9.80 in July.

The prices paid index (search) increased to 29.00 from 21.57 in July, but the prices received index slipped into negative territory with a reading of negative 1.00 from 0.98, showing that manufacturers have lost their ability to pass on costs.

The index only began to be compiled in July 2001, but has gained market attention as a precursor to the Philadelphia Fed's manufacturing index (due to be released Thursday), which is itself seen as a proxy for the Institute for Supply Management's (search) national manufacturing survey.