The New York Federal Reserve reports deep, continuing contraction in its manufacturing sector. The Empire State index fell 3-1/2 points in March to a severely contractionary -38.2. New orders showed acute weakness at -44.8, down nearly 15 points and pointing to severe contraction for shipments in the months ahead. Shipments in March are already showing acute contraction, at -22.7 vs. February's -8.1. Manufacturers in the region, as they are across the world, are aggressively cutting inventories, the index for which fell nearly 20 points in the month to -27.0.
Employment data show continued contraction with the number of employees index little changed at -38.2 though contraction in the average employee workweek did ease more than 7 points to -23.6, indicating that existing employees are making up for the work done by those that have been laid off. Both input and output price readings show continued contraction. A positive in the report is improvement in the 6-month outlook where readings, headed by a 3.1 general business conditions index vs. February's -6.6, generally edged into positive ground.
This report, along with the Philadelphia's manufacturing report, have been reporting more severe rates contraction than the national report from the ISM which in January and February began to contract at a less severe rate. There was no reaction to today's data.
The Empire State manufacturing index in February dropped more than 12 full points to minus 34.7. Meanwhile, the new orders index fell nearly 8 points to minus 30.5. Both these readings are record lows for the series going back to July 2001. The outlook worsened in February as respondents rated general business conditions six months ahead at minus 6.6, down 2-1/2 points from January.