The New York Fed’s Empire State business conditions index, a gauge of manufacturing activity in the state, fell 5.5 points in July to 1.1, the regional Fed bank said Monday. Economists had expected a flat reading, according to a survey by the Wall Street Journal. Any reading above zero indicates improving conditions.
Key Details
The index for new orders was little changed, inching up 0.2 points to 3.3 in July. The shipments index fell 8.6 points but stayed positive territory at 13.4. Unfilled orders fell 0.8 points to negative 8.8. The index for the number of employees rose into positive territory for the first time since January. Price increases continued to moderate. The price-paid index has now fallen nearly fifty points over the past year. Optimism about the future remained subdued. The index for future conditions edged down 4.6 points to 14.3 in July.
Big Picture
The index has been volatile this year, falling below negative 24 three times before recovering. “Momentum has been weak across a broad range of manufacturing surveys recently, and choppy inventory data are not yet pointing to a clear catalyst for improvement this month despite resilience elsewhere in the economy,” said Michael Feroli, chief economist at JP Morgan Chase, in a note to clients ahead of the report.
Market Reaction
Stocks were set to open lower on Monday, while the yield on the 10-year Treasury note fell to 3.80%.