The Econoday consensus estimate for the Empire State manufacturing index was +15.0 in a range of 13.0 to 17.2.
The actual index reading was 5.2, down 11.2 points from last month’s reading of 16.4.
In a new twist on the state of the allegedly strengthening economy, Econoday is “thankful” for the cooling.
Activity is thankfully cooling in the Empire State manufacturing area, to a general conditions index of 5.2 in April vs unsustainably strong levels of 16.4 and 18.7 in March and February.
Delivery times appear to be grinding to a halt indicating an outright bottleneck in the supply chain, at 16.1 which is a 16-year record high vs the prior month’s 10.4 which was a 13-year high. Growth in new orders eased in the month, down 14 points from March’s 7-year high to a still very respectable 7.0. But unfilled orders continue to mount higher, at 12.4 and just off last month’s 11-year high.
Manufacturers in the region are hiring with the employment index at a 2-year high of 13.9. Price data are confirming the strength with input costs very high and selling prices showing positive traction.
There’s been a burst of factory strength all year in the Northeast with the next Philly Fed report, which was the first regional report to begin lifting off, on Thursday.
Empire State Survey
Business activity grew at a more subdued pace in New York State, according to firms responding to the April 2017 Empire State Manufacturing Survey.
The headline general business conditions index fell eleven points to 5.2. The new orders index, which had climbed to a multiyear high in March, retreated sharply to 7.0, suggesting more modest growth. The shipments index edged up to 13.7, while the unfilled orders index slipped to 12.4. However, delivery times lengthened further, with that index climbing to a record high of 16.1. Labor market indicators pointed to further sturdy increases in both employment and hours worked. Input prices and selling prices rose at a modest pace again this month. Indexes assessing the six-month outlook continued to convey a fairly high degree of optimism.
Business Conditions, New Orders Shipments
Unfilled Orders, Delivery Times, Inventories
Prices Paid, Prices Received
Number of Employees, Workweek
These regional manufacturing reports have been a hoot.
The most unexpected thing in the report is that Econoday cheered a sharp slowdown in the rate of growth. One more month in the same direction by the same amount and the report will “unexpectedly” be deep in the red.
Lack of price pressures is noticeable. By a 36.5 to 3.6 margin, manufacturers report paying more for goods. By a 16.1 to 3.6 margin, manufacturers report receiving more for their finished goods.
Once again, there is a huge problem with these diffusion indexes. For example, one manufacturer reporting prices were up 10% and another reporting prices were down 1% would balance out. Every category is the same way. Employment up by a headcount of 3 will balance out employment down by a headcount of 100 (or vice versa).
All these reports measure is the direction of various components with no regards for the quantity of any movement. They have not matched actual factory output or retail sales for months on end.
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- General Merchandise Jobs Down 35,000 in March, Down 89,000 Since October: Is This Big Deal?
- Economists never know what the weather “was” until economic reports come out!
- Another ISM/PMI Divergence: Non-Manufacturing
Mike “Mish” Shedlock
Tony Bennett said:
The Trump Reflation meeting its Cherry Blossom fate.
News of an epidemic killing thousands would be met with news stories of investment opportunities in the undertaker/burial businesses, and increasing demand for “healthy” workers.
The financial trades will hype any metric possible to instigate “buying”, even if it is our own funeral plot, and if they downgrade one thing, it is only a ruse to sell another.
which means higher taxes said:
problem is all these new gov’t contracts is being front run for increased demand (read war) down the road,and with zero private sector demand (less than zero),state and federal gov’t are goin to be forced to massively raise taxes or issue more dept to pay the current (lol)”overheating” public sector demand
John Smith said:
Econoday is a shill for the Deep State. Even worse the sheeple believe this nonsense.
Do anaysts still claim ‘unexpected’ now that Obama is gone?
Tony Bennett said:
ACA still standing. New war.
I guess the new boss same as the old boss.
Tony Bennett said:
I guess things will heat up a bit in Washington next week.
Debt ceiling reached in March … when USG runs out of money a moving target, but now Fall the best guess.
No budget passed for FY2017 … government running on a Continuing Resolution that expires April 28th … something needs to be done quick to avoid shutdown.
Now, you would thing Congress would be working feverishly now – with healthy debate – to avoid shutdown. You would be wrong. Congress on vacation last week. This week. And, for good measure, this coming Monday. So, 3 days to resolve “crisis”. Obviously, the Ryan / McConnell gambit is to ram something threw at last second. Not over Dem concerns, but fiscal conservatives.