Global| Mar 16 2009The Empire State Index Reaches New Low
by:Tom Moeller
|in:Economy in Brief
Summary
This month's Empire State Index of manufacturing sector activity, reported by the Federal Reserve Bank of New York, fell to a new low for the series which dates back to 2001. Continued stress was indicated by the reading of -38.23, [...]
This month's Empire State Index of manufacturing sector activity, reported by the Federal Reserve Bank of New York, fell to a new low for the series which dates back to 2001. Continued stress was indicated by the reading of -38.23, down from -34.65 in February. The index averaged -10.10 last year and +17.23 during 2007. March's level was lower than Consensus expectations for a reading of -32.0.
The figure is a diffusion index. Since the series' inception in 2001 there has been a 68% correlation between its level and the three-month change in U.S. factory sector industrial production.
Price deflation was the message from the index of pricing pressure which remained negative for the fourth straight month, near the series' low. Since inception in 2001, there has been a 76% correlation between the index of prices paid and the three-month change in the core intermediate materials PPI.
The new orders index fell sharply to a new series low of -44.76. That compares to last March's reading of -44.76. More than fifty percent of survey participants reported lower levels of orders while only nine percent reported a higher reading.
The employment index fell slightly and remained near the series' low. In the history of the NY employment index, there has been an 87% correlation between it and the three-month growth in overall U.S. factory sector employment as reported by the Labor Department.
The Empire State index of expected business conditions in six months improved slightly from near the series' low. The subseries for employment and new orders improved slightly. The pricing index was unchanged after having moved into negative territory.
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 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. For more on the Empire State Manufacturing Survey, including methodologies and the latest report, click here.The Empire State data is available in Haver's SURVEYS database.
| Empire State Manufacturing Survey | March | February | March1 '08 | 2008 | 2007 | 2006 |
|---|---|---|---|---|---|---|
| General Business Conditions (diffusion index, %) | -38.23 | -34.65 | -19.28 | -10.10 | 17.23 | 20.24 |
| Prices Paid | -14.61 | -13.79 | 50.56 | 46.99 | 35.64 | 41.88 |
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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