Empire State: New York factory contraction deepens
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EMPIRE STATE: NEW YORK FACTORY CONTRACTION DEEPENS
Investors began the mid-July week with a report that indicates the contraction of the manufacturing sector is New York State has gathered some velocity this month.
The New York Federal Reserve's Empire State index USEMPM=ECI dipped to a reading of -6.60 from June's -6.00, not quite as dire as the expected full-point drop to -7.00.
An Empire State reading below zero indicates monthly contraction.
Manufacturing, which accounts for approximately 12% of U.S. GDP, continues to face the headwinds of high interest rates, which have prompted consumers and businesses alike to defer major expenditures for now.
Add to that the lingering post-pandemic demand pivot from goods to services, and what's left is an uphill battle.
Aside from the headline, the new orders and employment measures declined at a slower pace, while prices paid - an inflation predictor - gained some heat.
"Small improvements in the shipments, new orders and employment components were more than offset by sharper declines in supplier delivery times and inventories," writes Oliver Allen, senior U.S. economist at Pantheon Macroeconomics, who adds that the report "paints a similar picture to the raft of other surveys that we have for June: manufacturing output is no longer falling, but it is not growing by very much either."
On Thursday, the Philly Fed index will round out the story of Atlantic region factory activity:
(Stephen Culp)
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Empire State https://reut.rs/3S9Jrm5
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