N.Y. Fed Factory Index Plunges in January
by:Tom Moeller
|in:Economy in Brief
Summary
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Decline paced by negative levels of new orders & shipments.
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Employment & price readings weaken as well.
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Expectations improve.
The Federal Reserve Bank of New York reported that its index of factory sector activity declined to -32.9 in January from -11.2 in December. It was the lowest reading since May 2020 and down from a July 2021 high of 43.0. A reading of -8.0 had been expected in the Action Economics Forecast Survey.
Haver Analytics constructs an ISM-adjusted series which is comparable to the ISM composite index of factory sector series. This index fell to 45.5 in January from 52.1 in December. It was the lowest reading since May 2020 and down from a July 2021 high of 63.4.
The new orders reading declined to -31.1 this month from -3.6 in December. A lessened 15.5% of respondents reported higher new orders while an increased 46.6% of respondents reported a decline. The shipments index weakened to -22.4 from 5.3 in December.
The employment index fell to 2.8 this month from 14.0 in December. It was well below a November 2021 high of 26.0. Seventeen percent of respondents reported increased hiring while 13.9% indicated a decline. The average workweek index fell to -10.4 from -4.5 in December.
The index of prices paid weakened to 33.0 from 50.5 in December. It was significantly below an April 2022 high of 86.4 and the weakest figure since November 2020. Thirty-nine percent of respondents indicated paying higher prices while 6.3% paid less.
The index of expected business in six months improved to 8.0 in January from 6.3 in December. It was the highest level in four months. The improvement was led by higher readings for new orders and shipments although the expected employment index declined sharply. The indexes of prices paid & received fell sharply.
The N.Y. Fed survey data is contained in Haver’s SURVEYS database. The latest survey was conducted between January 3 and January 10. The expectations series is in Haver’s AS1REPNA database.
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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