NY Fed’s Empire State Manufacturing Survey Falls Short Of Expectations

DEVELOPING: The New York Federal Reserve’s Empire State Manufacturing Survey fell to 7.78 in February, more than the 8.50 expected, from a January reading of 9.95. Readings above 0 point to expansion, while those below indicate contraction.

The new orders index fell five points to 1.2 — which is clear evidence that orders were flat — while the shipments index ticked up to 14.1. The unfilled orders index remained negative at -6.7, though the delivery time index rose to 1.1, marking the first time it came out of negative territory in several months The index indicates that delivery times had yet  to shorten as in previous months. The inventories index fell to a slightly lower -2.3, though it too has been in negative territory.

While the employment indexes pointed to a modest increase in employment levels, there was again little change in the average workweek. That’s yet another bad sign for wage growth.

The prices paid index inched up two points to 14.6, indicating continued moderate input price increases, while the prices received index fell nine points to 3.4, suggesting a slowdown in selling price increases.

Indexes for the six-month outlook suggests significantly less optimism among firms than seen in recent months, including the survey released in December, which showed contraction for the first time in two years. The index for future general business conditions plunged twenty-three points to 25.6, its lowest level in more than two years. The future prices paid index fell to 27.0, while the future prices received index tanked by ten points to 5.6, its lowest level in more than five years. The index for expected number of employees was also lower, but remained positive at 24.7.

The capital expenditures index skyrocketed by 18 points to 32.6 — its highest level in more than three years — and the technology spending index rose to 19.1.