It looks as though manufacturing activity in the NY Fed region is slowing in April as the Empire Manufacturing report came in weaker than expected, showing a larger than expected decline. While economists were expecting the headline number to show just a modest decline from 22.5 down to 18.4, the actual decline was a bit larger to 15.8.Not a major decline by any stretch, but it does represent the fifth m/m decline in the last six months. The real weakness, however, was in the expectations component. As shown in the chart below, that reading saw its second largest m/m decline on record, falling from 44.1 down to 18.3. The only decline that was larger was following the 9/11 attacks, although we would note that back in September 2001 the m/m decline was over 60 points compared to 25.8 now. More recently, the last time the expectations index dropped by a similar amount was in January 2016.

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The table below breaks down this month’s report by each of its components.Here again, you can see the disparity between current conditions and expectations. While current conditions and expectations both declined m/m, for categories like New Orders and Shipments, expectations saw enormous declines. One bright side? On the inflation front, the Prices Paid and Prices Received components didn’t see any large moves higher.