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Economy in Brief

U.S. Empire State Index Stabilized
by Tom Moeller April 15, 2008

The April index of manufacturing activity in New York State recovered to 0.63% following the sharp falloff in March to a reading of -22.2%. It was better than expectations for continued weakness at a level of -17%. The figure is a diffusion index and it is reported by the Federal Reserve Bank of New York.

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.

New orders, shipments and inventories each improved.

The employment index, however, deteriorated to a level of 0.00% from 4.49% in March. During all of 1Q08 the employment index averaged 1.61% versus 11.28% averaged during all of last year. In the (perhaps too) short six year history of the NY employment index, there has been an 85% 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.

Pricing pressure rose even further to an index level of 57.29, its highest since 2005. Since 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 Empire State index of expected business conditions in six months fell to a reading near the recession low during 2001.

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. April 2002 is the first report, although survey data date back to July 2001.

For more on the Empire State Manufacturing Survey, including methodologies and the latest report, click here.

The Industrial Revolution and the Demographic Transition from the Federal Reserve Bank of Philadelphia is available here.

Empire State Manufacturing Survey April March April '07  2007 2006 2005
General Business Conditions (diffusion index, %)   0.63 -22.23  7.00 17.23 20.24 15.53
Prices Paid 57.29 50.56 40.48 35.64 41.88 44.74
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