NY Manufacturing Activity Contracts for Fourth Straight Month

Reuters

A gauge of manufacturing in New York State contracted in September for a fourth month in a row, falling to the lowest level since November, the New York Federal Reserve said in a report Thursday.

The New York Fed's ``Empire State'' general business conditions index fell to minus 8.82 in September from minus 7.72 the month before. Economists polled by Reuters had expected a reading of minus 4.0.

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The survey of manufacturing plants in the state is one of the earliest monthly guideposts to U.S. factory conditions. Some regional indicators have fared worse in recent months than the larger national index, which has stayed at a level indicating expansion, though just barely.

``Empire State continued to deteriorate in a month where many were expecting to see a slightly less negative picture. That is really not an encouraging sign,'' said Sean Incremona, economist at 4Cast Ltd in New York.

U.S. stock index futures cut gains immediately after the data, which came out at the same time as a slew of other reports, including consumer prices and initial jobless claims. Treasury prices slightly pared losses and the dollar held losses against the euro.

New orders slipped to minus 8.0 from minus 7.82, while inventories tumbled to minus 11.96 from minus 7.61. It was also the lowest level for new orders in 10 months.

Employment gauges also weakened. The index for the number of employees dropped to the lowest level since September 2009, falling to minus 5.43 from positive 3.26. The average employee workweek index held steady at minus 2.17.

In one bright spot, the outlook for the coming months improved, though it was still below levels seen earlier in the year. The index of business conditions six months ahead rose to 13.04 from 8.70.

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