Global| Sep 15 2008U.S. Empire State Index Negative; Prices Paid The Weakest Since January
by:Tom Moeller
|in:Economy in Brief
Summary
The Federal Reserve Bank of New York reported that its September index of manufacturing activity in the Empire State was again negative. At -7.41 the reading fell from a positive 2.77 in August. Following modest improvement from more [...]
The Federal Reserve Bank of New York reported that its September index of manufacturing activity in the Empire State was again negative. At -7.41 the reading fell from a positive 2.77 in August. Following modest improvement from more negative readings early this year, the figure has moved sideways. A reading of +1.0 for had been the Consensus expectation for September.
At 44.83, the index of pricing pressure fell more than twenty points from August to its lowest level since January. Since inception in 2001 there has been an 81% correlation between the index of prices paid and the three-month change in the core intermediate materials PPI.
The figure is a diffusion index. Since the series' inception in 2001 there has been a 55% correlation between the index level and the three-month change in U.S. factory sector industrial production.
The indexes for new orders, shipments and unfilled orders rose but delivery times, inventories and the average workweek fell.
The employment index also fell during September and was negative for the third consecutive month. In the (perhaps too) short seven year history of the NY employment index, there has been an 86% correlation between it and the three-month growth in overall factory sector employment.
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.
The Empire State index of expected business conditions in six months jumped to its highest level since October of last year. The subseries for shipments and employment jumped and the pricing series fell to its lowest level in twelve months.
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.
Determinants of automobile loan default and prepayment from the Federal Reserve Bank of Chicago can be found here.
| Empire State Manufacturing Survey | September | August | September '07 | 2007 | 2006 | 2005 |
|---|---|---|---|---|---|---|
| General Business Conditions (diffusion index, %) | -7.41 | 2.77 | 15.88 | 17.23 | 20.24 | 15.53 |
| Prices Paid | 44.83 | 65.17 | 35.11 | 35.64 | 41.88 | 44.74 |
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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