Empire State Manufacturing Index Contracts Third Month 

A pair of Fed regional manufacturing reports came out this morning. Both show contraction. The Empire State Index came in at -11.36, worse than any economist’s estimate. The Econoday Consensus Estimate was -7 and the range was -5 to -10. 

 Minus signs sweep the Empire State report with the headline at minus 11.36 which is more than 1 point below Econoday’s low end estimate. Looking at individual readings, new orders are in very deep trouble at minus 18.92 for a fifth straight month of contraction. And manufacturers in the region are not going to be able to turn to unfilled orders to keep busy with this reading extending a long string of contraction at minus 15.09 in September.

Lack of orders is showing up in shipments, which are at minus 13.61 for a third straight contraction, and in employment which is in a second month of contraction at minus 8.49. The workweek is down and delivery times are shortening, both consistent with weakening conditions. Price data show a second month of contraction for finished goods, which is another negative signal, and a narrowing and only marginal rise for prices of raw materials.

Empire State Manufacturing Report

Diving into Empire State Manufacturing Report details we see “new orders, shipments, and unfilled orders all declined at a steeper pace than last month. Price indexes suggested that input prices held steady, while selling prices declined at the fastest pace since 2009. Labor market indicators pointed to a continued decline in employment levels and hours worked.“

Empire State Conditions

Contractions

 At least the economists got the negative sign correct.