For the second month in a row, the Empire Fed has fallen and missed expectations. At 6.29 (vs 9.1 exp), this is the lowest since May as the average workweek (down from 4.81 to 1.08) and number of employees (down from 10.84 to 7.53) subindices fall notably. In general the index was not worse because of the effect of the six-months-outlook views (which soared 3pts to 40.6 – its highest since early 2012) when, as usual, current conditions deteriorate but offset by hopium that eventually things will get better, but even there employment (number of employees outlook down from 8.43 to 4.30) was seen as weaker.
From the September report:
The general business conditions index edged down two points but, at 6.3, remained in positive territory. The new orders index inched up two points to 2.4, while the shipments index jumped nearly fifteen points to 16.4—its highest level in considerably more than a year. The prices paid index was little changed at 21.5, while the prices received index climbed another five points to 8.6. Labor market conditions were mostly steady; the index for number of employees retreated three points to 7.5 and the average workweek index edged down to a neutral reading of 1.1. Indexes for the six-month outlook revealed increasingly widespread optimism about future business activity.
Business conditions strengthened for New York State manufacturers for a fourth consecutive month. The general business conditions index stood at 6.3—down almost two points from August but still at a level indicative of modest expansion. Slightly more than 25 percent of respondents reported that conditions had improved over the month, while 20 percent said conditions had worsened. The new orders index edged up two points to 2.4, while the shipments index surged fifteen points to 16.4, indicating that shipments picked up even as orders remained flat.
The future general business conditions index rose for the third straight month, climbing three points to 40.6, its highest level since the spring of 2012.
This month’s special question dealt with future selling prices, which continue to underperform inflation:
In response to a series of supplementary questions, manufacturers reported that their selling prices had risen by a little less than 1 percent, on average, over the past year, and they predicted an increase of 1.5 percent, on average, over the next twelve months. These increases roughly matched those reported in last September’s parallel survey. When asked a separate question about the probability of specified price changes over the next twelve months, the average respondent cited a 44 percent chance that selling prices would remain within 2 percent of current levels and a 43 percent chance that they would rise by 2 percent or more, but just a 3 percent chance that they would rise by at least 8 percent.
And now back to the Janet Yellen show.