Global| Nov 15 2010Empire State Factory Index Turns Negative But Expectations Improve
by:Tom Moeller
|in:Economy in Brief
Summary
In an abrupt turnaround, the Federal Reserve Bank of New York reported that its November Empire State Factory Index of General Business Conditions fell to -11.14, the first negative reading in over one year. The figure was well short [...]
In an abrupt turnaround, the Federal Reserve Bank of New York reported that
its November Empire State Factory Index of General Business Conditions fell
to -11.14, the first negative reading in over one year. The figure was well
short of Consensus expectations for +14.0. A sharp
drop in the new orders component to -24.38 led the decline with shipments at
-6.13. This combination dropped the unfilled orders figure to -9.09, nearly the
lowest in a year. The employment reading remained a positive 9.09 though that
was down sharply from the recent highs. (During the last ten years there has
been an 81% correlation between the jobs index and the m/m change in factory
sector payrolls.)
The prices paid index slipped to 22.08. Since inception there has been a 69% correlation between the index of prices paid and the monthly change in the core intermediate materials PPI.
Working the other way, the Empire State index of expected business conditions in six months improved to its highest level since April as all but one of the component series improved.
The Empire State data is available in Haver's SURVEYS database. The figures are diffusion indexes. Like the Philadelphia Fed Index of General Business Conditions, the Empire State Business Conditions Index reflects answers to independent survey questions; it is not a weighted combination of the components. The series dates back only to 2001.
| Empire State Manufacturing Survey | Nov | Oct | Sept | Oct. '09 | 2009 | 2008 | 2007 |
|---|---|---|---|---|---|---|---|
| General Business Conditions (diffusion index, %) | -11.14 | 15.73 | 4.14 | 22.34 | -2.76 | -9.97 | 17.22 |
| New Orders | -24.38 | 12.90 | 4.33 | 16.26 | -2.52 | -6.22 | 15.70 |
| Inventories | 0.00 | -11.67 | 1.49 | -17.11 | -22.89 | -7.87 | -3.95 |
| Employment | 9.09 | 21.67 | 14.93 | 1.32 | -17.28 | -5.36 | 11.28 |
| Prices Paid | 22.08 | 30.00 | 22.39 | 10.53 | 1.33 | 46.99 | 35.64 |
Tom Moeller
AuthorMore in Author Profile »Prior to joining Haver Analytics in 2000, Mr. Moeller worked as the Economist at Chancellor Capital Management from 1985 to 1999. There, he developed comprehensive economic forecasts and interpreted economic data for equity and fixed income portfolio managers. Also at Chancellor, Mr. Moeller worked as an equity analyst and was responsible for researching and rating companies in the economically sensitive automobile and housing industries for investment in Chancellor’s equity portfolio. Prior to joining Chancellor, Mr. Moeller was an Economist at Citibank from 1979 to 1984. He also analyzed pricing behavior in the metals industry for the Council on Wage and Price Stability in Washington, D.C. In 1999, Mr. Moeller received the award for most accurate forecast from the Forecasters' Club of New York. From 1990 to 1992 he was President of the New York Association for Business Economists. Mr. Moeller earned an M.B.A. in Finance from Fordham University, where he graduated in 1987. He holds a Bachelor of Arts in Economics from George Washington University.
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