The Empire State Manufacturing Survey index declined but remains in expansion. The key internals likewise declined but remains in expansion.

Analyst Opinion of Empire State Manufacturing Survey

I am not a fan of surveys – and this survey jumps around erratically – but has been relatively steady for the last year. This report was weaker than last month.

As this index is very noisy, it is hard to understand what these massive moves up or down mean.

Econintersect reminds you that this is a survey (a quantification of opinion). Please see caveats at the end of this post. However, sometimes it is better not to look too deeply into the details of a noisy survey as just the overview is all you need to know.

From the report:

Empire State Manufacturing Survey

The above graphic shows that when the index is in negative territory that it is not a signal of a recession – of 10 times in negative territory (since the Great Recession) – no recession occurred. Conversely, a positive number is likely to be indicating economic expansion. Historically, when it does make a correct negative prediction it can be timely – this index was only two months late in going negative after what was eventually determined to be the start of the 2007 recession.

This survey has a lot of extra bells and whistles which take attention away from the core questions: (1) are orders and (2) are unfilled orders (backlog) improving? – and the answer is that both declined but remain in expansion.