U.S. Empire State Manufacturing Index Slips During July

The General Business Conditions Index from the Federal Reserve Bank of New York eased to -6.6 during July from an unrevised -6.0 in June. Despite the easing, the index remained near the highest level since February, up from a low of -43.7 in January. The figure compared to expectations for a decline to -7.6 in the Action Economics Forecast Survey. The percentage of respondents reporting an improvement in business conditions fell to 24.8% from 30.2% in June while the percentage reporting a decline activity fell to 31.4% from 36.3% last month.

Haver Analytics constructs an ISM-adjusted series, which is comparable to the ISM manufacturing index. The figure fell to 48.0 in July from 49.0 in June and compared to a January low of 39.7. The reading compared to a high of 63.4 in July 2021. A level of 50 is the breakeven point between expansion and contraction.

The unfilled orders index fell to -11.2 this month from +1.0 in June. It was the lowest level in six months. The delivery times index fell to -9.2 and reversed the June increase to -4.1. The inventories measure declined to -6.1 from 1.0. It was the lowest level in four months. Moving higher, the new orders index edged up to -0.6 in July from -1.0 in June. A lessened 27.3% of respondents reported higher new orders while a lower 27.9% reported a decline. The shipments index rose to 3.9 after rising to 3.3 in June.

The employment index increased slightly this month to -7.9 from -8.7. It remained below the July 2023 high of 4.7. A higher 9.9% of respondents reported increases in employment while a greater 17.9% reported lower employment. The hours-worked index increased to -0.1 from -9.9 in June. It was the highest level since October of last year.

Inflation pressures were mixed this month. The prices paid index rose to 26.5 from 24.5 and the index remained up from a low of 16.7 in December. It remained well below its April 2022 high of 86.4. A slightly higher 31.6% of respondents reported higher prices while a steady 5.1% reported declines. The prices received index fell to 6.1 from of 7.1 in June. Its recent high was 28.4 in February of last year. A higher 13.3% of respondents reported higher prices received this month while a greater 7.1% reported lower prices.

The index of expectations for business conditions in the next six months fell during July to 25.8 from 30.1 in June. It remained improved versus a November 2023 low of -0.9. The expected new orders and shipments indexes eased this month but delivery times & inventories improved. The employment index fell sharply to its lowest level in three months and the expected hours-worked index declined to a two-year low. Expectations for capital spending remained improved slightly. The indexes of expected prices paid and received both improved.

The data were collected between July 2 and July 10. The headline index reflects the answer to only one question concerning general business conditions and is not calculated from the components.

The New York Fed survey data are contained in Haver’s SURVEYS database. The expectations series is in Haver’s AS1REPNA database.