Empire State Manufacturing Sector Contracts Further in September

Politics Reuters

Factory activity in New York state contracted for a second month in a row in September, falling to its lowest level in nearly 3-1/2 years as new orders shrank further, a report from the New York Federal Reserve showed on Monday.

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The New York Fed's "Empire State" general business conditions index dropped to minus 10.41, from minus 5.85 in August, frustrating economists' forecasts for an improvement to minus 2, according to a Reuters poll. It was the lowest level since April 2009.

The survey of manufacturing plants in the state is one of the earliest monthly guideposts to U.S. factory conditions. The sector contracted in August for the first time in 10 months.

A tent pole of the U.S. recovery when the economy was initially getting off the ground, manufacturing has been faltering in recent months.

Forward-looking new orders tumbled to minus 14.03 from minus 5.50. The measure was at its lowest level since November 2010.

Employment gauges deteriorated. The index for the number of employees fell to 4.26 from 16.47 and the average employee workweek index slipped to minus 1.06 from 3.53.

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Still, manufacturers were less gloomy about the future, with the index of business conditions six months ahead rising to 27.22 from 15.20.