Empire Manufacturing Shows Much More Modest Growth Under Expectations

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The Federal Reserve Bank of New York has released its Empire State Manufacturing Survey for April, and the results were far less robust than had been expected. The General Business Conditions Index was up at just 5.2 in April. Bloomberg had called for a gain of 15.0, and this is far less robust than the 16.4 reading seen in March and 18.7 seen in February.

Monday’s report from the New York Fed was one of more subdued growth. Among New York State manufacturers, 35% of respondents said that general business conditions had improved over the month, but 30% reported that they had worsened.

While weak, this cooling in the manufacturing area of the New York region showed that delivery times were slower with a bottlenecking in the supply chain. New orders growth also was shown to have eased in April, down 14 points to 7.0. Unfilled orders were up at 12.4, but that was down marginally from the prior month.

What did grow was the employment index, up at 13.9 in April. That is a two-year high.

The New York Fed’s overview noted about labor and prices:

Labor market indicators pointed to further sturdy increases in both employment and hours worked. Input prices and selling prices rose at a modest pace again this month. Indexes assessing the six-month outlook continued to convey a fairly high degree of optimism about future conditions.

Monday’s report may have been weaker than expected, but expectations were mixed to higher. The New York Fed said:

Forward-looking indexes were mixed but generally at high levels, suggesting fairly widespread optimism about future conditions. The index for future business conditions rose three points to 39.9, while the future new orders and shipments indexes declined modestly. Employment and hours worked were expected to increase fairly briskly in the months ahead. The index for planned capital expenditures climbed four points to 27.7—its highest level in more than two years—and the technology spending index jumped seven points to 15.3.