Haver Analytics
Haver Analytics
| Jun 17 2024

U.S. Empire State Manufacturing Index in June Still Indicates Contraction

  • Though negative, the index rose to the highest level since February.
  • Component improvement is widespread, excluding employment & prices.
  • Expectations are greatly improved.

The General Business Conditions Index from the Federal Reserve Bank of New York increased to -6.0 during June from a reading of -15.6 in May. It was the highest level since February, up from a low of -43.7 in January. The gain outpaced expectations for a rise to -11.9 in the Action Economics Forecast Survey. The percentage of respondents reporting an improvement in business conditions increased to 30.2% from 21.4% in May while the percentage reporting a decrease eased to 36.3% from 37.0% last month.

Haver Analytics constructs an ISM-adjusted series, which is comparable to the ISM manufacturing index. The figure rose to 49.0 in June from 46.9 in May and a January low of 39.7. The index stands at the highest level since November of last year. A level of 50 is the breakeven point between expansion and contraction.

The new orders index increased to -1.0 in June from a little-changed -16.6 in May. An increased 30.6% of respondents reported higher new orders while a lessened 31.7% reported a decline. The shipments index rose to 3.3 after rising to -1.2 in May. The unfilled orders index improved to 1.0 in June from -8.1 in May. It was improved from a low of -24.2 in January. The delivery times index rose to -4.1 from -9.1 in May. Working the other way, the inventories reading slipped to 1.0 after easing to 2.0 in May. The average workweek reading of -9.9 this month compared to -5.8 in May. It’s been negative since October.

The employment index also declined this month, falling to -8.7 from -6.4 in May. It was the lowest reading since March 2023 and below the July 2023 high of 4.7. A lessened 6.5% of respondents reported increases in employment while a fairly steady 15.2% reported lower employment.

Inflation pressures moderated in June. The prices paid index fell to 24.5 from 28.3 but the index remained up from a low of 16.7 in December. It was well below its April 2022 high of 86.4. A lessened 29.6% of respondents reported higher prices while a lessened 5.1% reported a decline. The prices received index fell to 7.1 from of 14.1 in May. Its recent high was 28.4 in February of last year. A lessened 11.2% of respondents reported higher prices received this month while a lessened 4.1% reported lower prices.

Indicating that firms are more optimistic about the future, expectations for business conditions in the next six months improved during June. The index rose to 30.1 in June from 14.5 in May, up from a November 2023 low of -0.9. The expected new orders and shipments indexes surged but delivery times & inventories fell. The employment index improved moderately but hours-worked fell sharply. Expectations for capital spending remained lower. The indexes of expected prices paid and received both declined.

The data was collected between June 2 and June 9. The headline index reflects the answer to only one question concerning general business conditions and is not calculated from the components.

The New York Fed survey data are contained in Haver’s SURVEYS database. The expectations series is in Haver’s AS1REPNA data

  • 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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