Manufacturing activity in the New York region declined in May as the New York Federal Reserve’s gauge of current business conditions in the area hit negative territory for the first time since October.
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The index fell six points this month to -1 from 5.2 in April despite Wall Street expectations for it to rise to 7. A small decline in orders and shipments put pressure on the new orders index which fell to -4.4 for the month from 7 in April, while the prices paid index hit its lowest level since November. The data contrast with the Institute for Supply Management’s gauge of U.S. manufacturing activity, which saw its eighth-straight month of growth in April.
But it wasn’t all bad news on Monday morning for the New York region: The employment component remained in positive territory for the month, as the broader U.S. labor market continues to show signs of strength. The Empire State employment index slipped to 11.9 while the average workweek was little changed. What’s more, the six-month outlook showed New York area firms remained optimistic about the future as the future business conditions index held steady at 39.3 and future new orders and shipment components were slightly higher with employment forecast to increase over the next few months.