Weakness Persists in New York Fed Manufacturing

November 16, 2015 by Jon C. Ogg

The only key economic report for Monday was the Federal Reserve Bank of New York’s Empire Manufacturing Survey. What was anticipated to be a negative report for the month of November was even more negative than expected.

The November 2015 Empire State Manufacturing Survey showed that the General Business Conditions Index came in at -10.74. Bloomberg had its consensus estimate at -5.0, but the October reading was -11.36. What really stands out here is that the New York Fed’s report indicates that business activity declined for the fourth consecutive month in that Fed district. Some 19% of respondents reported that conditions had improved over the month, but 29% had reported that conditions had worsened.

New orders and shipments also declined, although at a slower pace than last month. Price indexes suggested that input prices increased slightly, while selling prices were slightly lower. Labor market conditions continued to deteriorate, with survey indicators pointing to a decline in both employment levels and hours worked. Indexes for the six-month outlook were little changed from last month and suggested that optimism about future conditions remained tepid, even though employment is expected to increase.

Individual readings were listed as follows:

  • The new orders index rose by seven points, but at -11.8 it pointed to an ongoing decline in orders.
  • The shipments index rose by 10 points to -4.1, signaling that shipments also declined.
  • The unfilled orders index was down by three points to -18.2.
  • Delivery times were shorter again this month, with the delivery time index holding steady at -10.9.
  • The inventories index was down by 10 points to -17.3, indicating a significant reduction in inventory levels.
  • The prices paid index rose to 4.6, suggesting that input prices increased somewhat after holding steady last month.
  • The prices received index remained negative at -4.6, indicating that selling prices declined for a third straight month.

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Another round of negativity was seen in the New York District’s employment numbers. These were listed as follows:

Labor market conditions continued to weaken. The index for number of employees was little changed at -7.3, a sign that employment levels fell for a third consecutive month, and the average workweek index moved down seven points to -14.6, its lowest level since mid-2011.

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