U.S. Empire State Manufacturing Index Strengthens in September
by:Tom Moeller
|in:Economy in Brief
Summary
- Index increases to two-year high.
- New orders & shipments lead increase as employment improves modestly.
- Prices paid & received readings ease.
The General Business Conditions Index from the Federal Reserve Bank of New York jumped to 11.5 in September from -4.7 in August. It as the first positive number since November 2023. A reading of -4.5 had been expected in the Action Economics Forecast Survey. The percentage of respondents reporting an improvement in business conditions rose to 32.7% from 28.5% in August while the percentage reporting a decline in activity fell to 21.2% from 33.2% last month. The headline index reflects the answer to a single question concerning the state of economic activity. The survey responses were collected between September 3 and September 10.
Haver Analytics calculates a composite index, which is comparable to the ISM manufacturing index. That index rose to 52.0 in September from 47.2 in August. A level of 50 is the breakeven point between expansion and contraction.
The orders index rose to 9.4, its first positive reading in 12 months, from -7.9 in August. The shipments index jumped to 17.9, its highest reading since June 2023, from 0.3. The unfilled orders index rose to 2.1 from -7.4 in August and -11.2 in July. Delivery times shortened as the index improved to -1.1 from -3.2. Inventories jumped to a break-even level of zero from -10.6 in August.
Labor market conditions improved in September. The employment index of -5.7 compared to -6.7 in August, but was the eleventh consecutive month below zero. A lessened 7.1% of respondents reported increases in employment while a smaller 12.8% reported lower employment. The hours-worked index rebounded to 2.9 after falling to -17.8 in August.
Inflation pressures weakened this month. The prices paid index eased to 23.2 in September after falling to 23.4 in August from 26.5 in July. Thirty-one percent of respondents were paying higher input prices, a bit less than in August, while a steady 7.4% reported paying lower input prices. The prices received index also deteriorated to 7.4 from 8.5 in August. Fifteen percent of respondents reported an increase in prices, up from 13.8% in August, while 7.4% reported a decrease in prices, up from 5.3% in August.
Firms grew more optimistic about the outlook. The index for future business conditions of 30.6 this month compared to 22.9 in August and was the highest level since January 2022. The outlook for new orders & shipments surged, but employment eased slightly after surging in August. The future prices paid index jumped to its highest level since February of last year but capital spending plans weakened sharply.
The headline index reflects the answer to only one question concerning general business conditions and is not calculated from the components. The indexes in this report are diffusion indexes and measure the percentage of respondents indicating an increase minus the percentage indicating a decrease.
The New York Fed survey data are contained in Haver’s SURVEYS database. The expectations series is in Haver’s AS1REPNA database.
Tom Moeller
AuthorMore in Author Profile »Prior to joining Haver Analytics in 2000, Mr. Moeller worked as the Economist at Chancellor Capital Management from 1985 to 1999. There, he developed comprehensive economic forecasts and interpreted economic data for equity and fixed income portfolio managers. Also at Chancellor, Mr. Moeller worked as an equity analyst and was responsible for researching and rating companies in the economically sensitive automobile and housing industries for investment in Chancellor’s equity portfolio. Prior to joining Chancellor, Mr. Moeller was an Economist at Citibank from 1979 to 1984. He also analyzed pricing behavior in the metals industry for the Council on Wage and Price Stability in Washington, D.C. In 1999, Mr. Moeller received the award for most accurate forecast from the Forecasters' Club of New York. From 1990 to 1992 he was President of the New York Association for Business Economists. Mr. Moeller earned an M.B.A. in Finance from Fordham University, where he graduated in 1987. He holds a Bachelor of Arts in Economics from George Washington University.
