The Empire State Manufacturing Survey kicks off the list of regional surveys by the Fed.
The Empire State report turned in a composite reading of -1.0 vs an Econoday consensus expectation of 8.0.
Econoday calls this welcome news.
Activity in the New York manufacturing region is flattening out this month following a run of unusually strong growth. May’s Empire State index came in at a lower-than-expected minus 1.0 with new orders also moving into the negative column to minus 4.4. Unfilled orders, which were very strong in April and March, also moved below zero to minus 3.7.
But the strength in prior orders is keeping production up, at a very solid plus 10.6 this month, and is also keeping hiring up, at 11.9 and only 2 points slower than April’s 2-year high. Delivery times continue to slow though to much a lesser degree than prior months which points to easing congestion in the supply chain. Inventories are flat and price pressures still increasing though, once again, less than before.
The slowing in this report is actually welcome news, giving time for supply constraints to ease and reducing risks of overheating. This report points to easing for Thursday’s Philly Fed where another month of enormous strength is currently the expectation. Yet despite the strength of anecdotal reports like Empire State and Philly, definitive factory data out of Washington have yet to show outsized acceleration. Watch for the manufacturing component of tomorrow’s industrial production, definitive data where only a moderate rise is expected.
Current and Expected Business Conditions
Industrial Production Manufacturing
Concerns about overheating seem more than a bit ridiculous in light of actual manufacturing production.
Once again, economic parrots are squawking about diffusion indices that have no basis in reality. The graph makes it pretty clear that the “strong rebound” was exaggerated by a lengthy period in recession-like negative territory.
Tomorrow we see actual industrial production numbers for April.
Mike “Mish” Shedlock
Good news great : )
EU tried for its own version of Trump but it didn’t quite work out right.
https://pbs.twimg.com/media/C_4VBK3XsAE4Owr.jpg
The most recent capacity utilization number is 76.1 from the St. Louis Fed…What are you New Yorkers smoking???
Just how tiny, tiny a part of manufacturing does New York State have currently?
Must be 1/100,000th or so……. Snark!
The manufacture of financial products including infinite analysts who create the hot wind beneath market’s waxen wings.
Always fun to compare Parrot to priors.
March Empire survey:
“Manufacturers in New York state, like their colleagues in the Mid-Atlantic, are having their hands full with exceptionally strong activity. The Empire State index did edge back 2.3 points this month to 16.4 from February’s 18.7 but this reading is a single-question sentiment index. More substantial readings are through the roof.
…
The strength of these reports are inflationary, pointing to the risk of supply dislocations. Yet anecdotal reports have not panned out much at all to actual strength in the real economy, a disconnect that appears very likely, given the enormous strength of these regional reports, to resolve itself with outsized strength for the industrial production and factory order reports.”
http://mam.econoday.com/byshoweventfull.asp?fid=477773&cust=mam&year=2017&lid=0&prev=/byweek.asp#top
…
April Empire survey:
“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.
…
Empire State has been signaling exceptionally strong acceleration in the manufacturing sector and has beaten Econoday’s consensus in 4 of the last 5 five reports. New orders are at an 8-year high and unfilled orders are at an 11-year high. Empire State’s headline index is tracking at a 3-year high, beating expectations by 1 point in March at 16.4. For April, forecasters see the index tracking only slightly back to 15.0” (actual 5.2).
http://mam.econoday.com/byshoweventfull.asp?fid=477774&cust=mam&year=2017&lid=0&prev=/byweek.asp#top
Trump Reflation OVER
Reality at the plate
Reality is moderate growth of 1-2% for the foreseeable future.
What’s growing?
Debt?
Job killing automation?
Job killing cheap imports?
Corporate profits derived from debt induced consumption and the elimination of expensive overhead (employees)?
All the things you mention are probably growing. What else is growing?
GDP
150,000-200,000 new jobs each month
Hours worked per week
Hourly wages
# of shale wells
tech innovations which lower prices
trade
markets at new highs
and hundreds more
Can you prove what you say? Not with government lies or are you part of the government lies?
“Reduce the risk of overheating…..” these people should report to the nearest drug treatment center for extensive rehab. Econoday is a great source of humor.
Sorry J. I am not part of the government. I’m not even American. What numbers would you use? I take it you don’t believe your own government or industry data? Why don’t you show me the numbers that you have? What markets do you follow? Where do you get your data on shale wells drilled? Where do your job numbers come from?
Where I live, the economy is similarly growing at a moderate pace, and anyone with suitable skills who wants to work, is working. The only people who are unemployed lack the skills to do the jobs that are posted.
Is America really any different?