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Economy in Brief

U.S. Empire State Index Down Sharply This Month
by Tom Moeller September 17, 2007

The index of manufacturing activity in New York State in September. The Index of General Business Conditions fell 10.4 points to 14.70 after its 1.4 point drop in August. A shallower decline to 18 had been expected. The figures are reported by the Federal Reserve Bank of New York.

Since the series' inception in 2001 there has been a 75% correlation between the index level and the three month change in U.S. factory sector industrial production.

Fewer new orders were reflected in the index's decline but the index for employment rose. The shipments index fell a whopping 23.73 points to a record low in negative territory.

Like the Philadelphia Fed Index of General Business Conditions, the Empire State Business Conditions Index reflects answers to an independent survey question; it is not a weighted combination of the components.

Pricing pressure eased somewhat as the prices paid index rose into positive territory for the first time in three month. Since 2001 there has been an 88% correlation between the index of prices paid and the three month change in the core intermediate materials PPI.

The Empire State index of expected business conditions in six months reversed most of its August improvement and fell 1.6% points.

The Empire State Manufacturing Survey is a monthly survey of manufacturers in New York State conducted by the Federal Reserve Bank of New York. Participants from across the state in a variety of industries respond to a questionnaire and report the change in a variety of indicators from the previous month. Respondents also state the likely direction of these same indicators six months ahead. April 2002 is the first report, although survey data date back to July 2001.

For more on the Empire State Manufacturing Survey, including methodologies and the latest report, click here.

Empire State Manufacturing Survey September August Sept. '06 2006 2005 2004
General Business Conditions (diffusion index) 14.70 25.06 15.40 20.33 15.62 28.70
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