The New York Fed Manufacturing Index, also known as the Empire State Manufacturing Index, measures business conditions in the manufacturing sector in the state of New York. It is calculated based on a survey of several hundred large manufacturers operating in the state of New York. A level above 0 indicates an improvement in conditions, while a level below 0 means that conditions are worsening.
In July, the NY Fed Current Conditions index surged to an all-time high of 43.0, up from 17.4 in June. The figure came in well above market expectations, which hovered around 18.0 points. The Current Prices index 6.1 points to a level of 39.4, likewise topping the previous record. Employment conditions improved this month, with the Current Number of Employees index rising from 12.3 to 20.6. Current new orders rose, with the corresponding index advancing 16.9 points to a level of 33.2.
Business activity in New York’s manufacturing sector increased at a record-setting pace last month, at least according to the Empire State Index. New orders increased robustly, but delivery times continued to lengthen and the number of orders going unfilled rose. Selling prices advanced to an unprecedented level as inflationary pressures continue to show up nearly everywhere in the economy. Looking ahead, New York firms remain optimistic that conditions will improve over the next sixth months. The record-setting report came at an interesting time, as Federal Reserve chairman Jerome Powell recently claimed that the economy is still “a ways off” from reaching a level that would trigger a taper of the asset purchase program, let alone a rate hike. It is unclear how hot the Fed is willing to let the economy run before they take any action to combat the mounting pressures on prices. Until that happens, we will continue to see positive indicators for business conditions but soaring prices as well.
July 15, 2021