Empire State Manufacturing Activity Contracts in March
New York business conditions deteriorated in April, with new orders falling further into the red, according to data released Wednesday by the Federal Reserve Bank of New York. The report, one of the first to cover the second quarter, may contribute to worries about the U.S. expansion's health.
The Empire State's business conditions index declined to -1.19 in April from 6.90 in March. It was the first negative reading since December.
Economists surveyed by The Wall Street Journal expected the latest index to increase to 8.0. A reading above 0 indicates expansion.
Most worrisome was the third consecutive drop in orders. The new orders index worsened to -6.00 in April from -2.39 in March.
The shipments index, however, rebounded to 15.23 after it was cut nearly in half, falling to 7.93 in March from 14.12 in February.
Demand for labor is easing. The employment index fell to 9.57 from 18.56. The workweek index plunged to -4.26 from 5.15.
Fewer New York state manufacturers are raising selling prices this month even as input prices increase. The prices-received index declined to 4.26 from 8.25 in March. The prices-paid index increased to 19.15 from 12.37.
"Many of the indexes assessing the six-month outlook conveyed more optimism about future business activity than they had in February and March," the report said.
The general business conditions expectations index for the next six months rose to 37.06 in April from 30.72 in March but it is still down from a three-year high reading of 48.35 in January.
New orders expectations increased to 33.57 from 26.31. The employee expectations slowed to 22.34 from 28.87.
The New York Fed survey is the first monthly factory report released by regional Fed banks. The Philadelphia Fed will release its survey Thursday. Economists expect that survey to show a small pickup in activity.
Economists use the Fed surveys as guideposts to forecast the health of the national industrial sector as captured in the monthly manufacturing report done by the Institute for Supply Management.