Empire State Manufacturing Survey Remains in Contraction, Labor Conditions Weaken

The Empire State Manufacturing Survey, the New York Federal Reserve’s gauge of manufacturing activity in the region, remained in contraction in September. The gauge increased to a reading of -1.99, up from a reading of -2.41 in August.

The results missed the median forecast calling for an increase to -1.00 and labor conditions continued to weaken significantly as both employment levels and the average workweek fell lower. Readings above 0 on the Empire State Manufacturing Survey indicate expansion, while those below point to contraction.

Manufacturing firms in New York State reported a decline in business activity in September. Twenty-two (22%) of respondents reported that business conditions improved over the prior month, but 24% reported that conditions had worsened.

The employment index declined 13 points to -14.3, suggesting that employment levels contracted and the average workweek index posted a similar decline. The work week fell 14 points to -11.6—a sign of retrenchment in hours worked. Both of these indexes reached their lowest levels measured yet in 2016. The prices paid index was flat at 17.0, suggesting that input prices continued to rise at a moderate pace, and the prices received index held steady at 1.8, signaling that selling prices edged slightly higher.