Recent Updates
- Spain: Construction Permits (Mar)
- Flash PMIs: Japan, France, Germany, Euro Area, UK (May)
- Sudan: Trade (Mar)
- South Africa: Leading Indicators (Mar)
- Hungary: Employment of Fostered Workers (Mar)
- more updates...
Economy in Brief
Chicago Fed National Activity Index Improves in April
The Chicago Fed National Activity Index (CFNAI) rose to 0.47 during April...
IFO Registers Small Rebound on the Month
Germany's IFO index has rebounded on the month...
FIBER: Industrial Commodity Prices Continue to Decline
Despite the recent improvement in U.S. factory output, many industrial commodity prices have weakened...
U.K. Consumer Sentiment Hits Lowest Reading since 1996
Of these 13 readings eight of them declined on the month in May three of them improved and two of them were unchanged...
U.S. Existing Home Sales Continue to Fall in April as Houses Become Less Affordable
The combination of soaring home prices across the nation and rising interest rates is making homes less affordable...
Viewpoints
Commentaries are the opinions of the author and do not reflect the views of Haver Analytics.
Profits & Margins Plunge In Q1: Expect More Margin Contraction As Fed Squeezes Inflation
The Many Links of Inflation Cycle: Hard Landing Is Needed to Crack Them
Peak Inflation and Fed Policy: A Relationship which Should Worry the Fed and Scare Investors
Why Have the Yields on TIPS Been Negative in the Past Two Years?
by Tom Moeller December 17, 2012
The Empire State Factory Index of General Business Conditions was negative for the fifth consecutive month. The December reading of -8.10 was nearly the lowest level of the economic recovery. Consensus expectations had been for m/m improvement to -1.0. The Fed indicated that revenues in October and November were 7% and 5%, respectively, lower than they would have been due to superstorm Sandy. Based on these figures, Haver Analytics calculates an index that is compatible to the ISM series. The adjusted figure declined to 48.1, just above its lowest since September of last year. Since inception in 2001, the business conditions index has had a 64% correlation with the quarterly change in real GDP.
The shipments figure remained positive, as it has mostly been for more than a year. However, the other index levels were broadly negative. Employment was negative for the third consecutive month. During the last ten years there has been a 76% correlation between the jobs index and the m/m change in factory sector payrolls. New orders were negative for the fifth month in the last six.
The reading for prices paid improved slightly m/m to 6.13 but remained sharply lower than its highs earlier this year. Twenty percent of respondents indicated paying higher prices while 4% paid less. During the last ten years there has been a 64% correlation between the index and the 3-month change in the intermediate goods PPI.
Looking ahead, the Empire State index of expected business conditions in six months improved to 18.66. However, it still was near its lowest in a year. Component index readings were broadly higher except inventories & technology spending. The shipments and new orders series soared.
The Empire State figures are diffusion indexes which are calculated by subtracting the percent of respondents reporting poorer business conditions from those reporting improvement. Thus, they have a good correlation with growth in the series covered. The data is available in Haver's SURVEYS database. The ISM-adjusted headline index is calculated by Haver Analytics. The series date back only to 2001. The Consensus expectation figure is in Haver's AS1REPNA database.
Empire State Manufacturing Survey | Dec | Nov | Oct | Dec'11 | 2012 | 2011 | 2010 |
---|---|---|---|---|---|---|---|
General Business Conditions (ISM Adjusted) | 48.1 | 49.0 | 47.7 | 52.5 | 51.8 | 51.7 | 52.9 |
General Business Conditions (Diffusion Index, %) | -8.10 | -5.22 | -6.16 | 8.19 | 4.23 | 4.33 | 13.85 |
New Orders | -3.70 | 3.08 | -8.97 | 5.99 | 1.29 | 4.00 | 9.88 |
Shipments | 8.83 | 14.59 | -6.40 | 20.06 | 11.02 | 9.39 | 11.61 |
Unfilled Orders | -6.45 | -11.24 | -18.28 | -15.12 | -8.83 | -5.29 | -6.58 |
Delivery Time | -2.15 | -1.12 | -4.30 | 0.00 | -0.30 | -0.91 | -2.87 |
Inventories | -11.83 | -12.36 | -2.15 | -3.49 | -2.91 | -1.80 | -1.48 |
Number of Employees | -9.68 | -14.61 | -1.08 | 2.33 | 8.62 | 6.68 | 14.29 |
Prices Paid | 16.13 | 14.61 | 17.20 | 2.42 | 24.71 | 40.66 | 29.63 |