Conditions for New York manufacturers have unexpectedly deteriorated in the month of August, according to a report released by the Federal Reserve Bank of New York on Wednesday, with the index of regional manufacturing activity turning negative for the first time in ten months. The New York Fed said its general business conditions index dropped to a negative 5.9 in August from a positive 7.4 in July, with a negative reading indicating a contraction in regional manufacturing activity. Economists had expected the index to show a much more modest decrease to 7.0. With the much steeper than expected decrease, the index fell into negative territory for the first time since hitting a negative 7.2 in October of 2011. The deterioration in manufacturing conditions was partly due to a continued decrease in new orders, with the new orders index falling to a negative 5.5 in August from a negative 2.7 in July. The shipments index also fell to 4.1 in August from 10.3 in July. While the index remained positive, the decrease indicated a notable slowdown in the pace of growth. Similarly, the number of employees index dropped to 16.5 in August from 18.5 in July, pointing to a slowdown in the pace of job growth in the New York manufacturing sector. The report showed a mixed picture on the inflation front, as the prices paid index jumped to 16.5 in August from 7.4 in July, while the prices received index fell to 2.4 from 3.7. Looking ahead, the report showed that the future general business activity index fell for the seventh consecutive month, dropping to 15.2 in August from 20.2 in July.