Global| Jan 17 2017Empire State Survey Remains Positive; Prices Surge
by:Tom Moeller
|in:Economy in Brief
Summary
The Empire State Manufacturing Index of General Business Conditions for January continued to suggest positive economic conditions, though it eased to 6.5 in January from 7.6 in December. It was the third straight positive reading [...]
The Empire State Manufacturing Index of General Business Conditions for January continued to suggest positive economic conditions, though it eased to 6.5 in January from 7.6 in December. It was the third straight positive reading following more than a year's worth of negative figures. A January level of 8.1 had been expected in the Action Economics Forecast Survey. Figures back to 2015 were revised. These data, reported by the Federal Reserve Bank of New York, reflect business conditions in New York, northern New Jersey and southern Connecticut.
Based on these figures, Haver Analytics calculates a seasonally adjusted index that is comparable to the ISM series. The adjusted figure improved to 50.9 from 48.5. It was the highest level since April and also the first to indicate positive growth in the same period. During the last ten years, the index posted a 63% correlation with the change in real GDP.
Amongst the index components, new orders, shipments and inventories each posted positive readings. Other series were negative, but improved versus December. The employment index jumped to -1.7, its least negative figure since August. During the last ten years, there has been a 69% correlation between the employment index and the m/m change in factory sector payrolls.
The prices paid series jumped to 36.1, the highest level since January 2014. A sharply increased 41.2% of respondents reported paying higher prices, while a fairly steady 5.0% reported them lower. The prices received index similarly surged to 17.6, its highest point since April 2012.
The reading of expected business conditions six months ahead held steady at an elevated 49.7, which represented the highest degree of optimism since January 2012.
The Empire State figures are diffusion indexes, which are calculated by subtracting the percent of respondents reporting declines from those reporting gains. The data are available in Haver's SURVEYS database. The ISM-adjusted headline index dates back to 2001. The Action Economics Forecasts can be found in Haver's AS1REPNA database.
Monetary Policy in a Time of Uncertainty is the title of today's speech by Fed Governor Lael Brainard and it can be found here.
| Empire State Manufacturing Survey | Jan | Dec | Nov | Jan'16 | 2016 | 2015 | 2014 |
|---|---|---|---|---|---|---|---|
| General Business Conditions (Diffusion Index, %, SA) | 6.5 | 7.6 | 2.2 | -16.8 | -2.5 | -2.3 | 11.9 |
| General Business Conditions Index (ISM Adjusted, >50=Increasing Activity, SA) | 50.9 | 48.5 | 47.3 | 43.4 | 48.2 | 48.9 | 52.4 |
| New Orders | 3.1 | 10.4 | 4.0 | -22.4 | -0.7 | -5.6 | 7.9 |
| Shipments | 7.3 | 8.6 | 8.6 | -11.5 | 1.8 | 4.0 | 12.1 |
| Unfilled Orders | -1.7 | -10.4 | -12.7 | -11.0 | -8.8 | -10.5 | -9.0 |
| Delivery Time | -2.5 | -7.8 | -5.5 | -13.0 | -4.8 | -5.3 | -5.2 |
| Inventories | 2.5 | -13.9 | -23.6 | -6.0 | -9.6 | -7.1 | -1.8 |
| Number of Employees | -1.7 | -12.2 | -10.9 | -13.0 | -5.0 | 2.7 | 10.9 |
| Average Employee Workweek | -4.2 | -7.0 | -10.9 | -6.0 | -5.4 | -5.3 | 1.4s |
| Prices Paid | 36.1 | 22.6 | 15.5 | 16.0 | 15.7 | 8.8 | 20.9 |
| Expectations 6 Months Ahead | 49.7 | 49.7 | 31.1 | 10.4 | 29.0 | 30.3 | 40.2 |
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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