The general business conditions index in the New York Fed's Empire State survey of manufacturing is a bit higher at minus 14.3 in April after falling to minus 20.9 in March. The April reading is below the consensus of minus 5.1 in the Econoday survey of forecasters. The index has been in negative territory for the past five months. The underlying trend for current conditions in 2024 appears to remain one of moderate contraction. The outlook for six months from now has softened a bit with the future conditions index at 16.7 in April after 21.6 in March. Although the future index anticipates a return to growth, it expects it to be modest.

The detail indexes in the report reflect little change in conditions in April from March. The new orders index firmed slightly but remains negative at minus 16.2 in April after minus 17.2 in March. The unfilled orders index is essentially the same at minus 10.1 in April after minus 10.9 in March. The shipments index is down to minus 14.4 after minus 6.9 in the prior month. Delivery times were a little speedier at minus 7.9 after minus 1.0. There are few delays in the supply chain.

The index for prices paid is up to 33.7 in April after 28.7 in March due to an uptick in energy costs. The prices received index is down a bit to 16.9 in April from 17.8 in the prior month. Overall upward price pressures remain well below the peaks in 2022 and are trending lower, albeit unevenly. The ability to raise prices is also lower than in the past couple of years but companies are able to pass through some costs.

The Empire State index is expected to bounce back in April to minus 5.1 following March's nearly 13-point fall to minus 20.9. This index has been volatile this year.

The New York Fed conducts this monthly survey of manufacturers in New York State. Participants from across the state represent a variety of industries. On the first of each month, the same pool of roughly 200 manufacturing executives (usually the CEO or the president) is sent a questionnaire to report the change in an assortment of indicators from the previous month. Respondents also give their views about the likely direction of these same indicators six months ahead.

Investors track economic data like the Empire State Manufacturing Survey to understand the economic backdrop for the various markets. The stock market likes to see healthy economic growth because that translates to higher corporate profits. The bond market prefers a moderate growth environment that won't generate inflationary pressures. The Empire Manufacturing Survey gives a detailed look at New York state's manufacturing sector, how busy it is and where things are headed. Since manufacturing is a major sector of the economy, this report has a big influence on the markets. Some of the Empire State Survey sub-indexes also provide insight on commodity prices and other clues on inflation. The Federal Reserve closely watches this report because when inflation signals are flashing, policymakers can reset the direction of interest rates. As a consequence, the bond market can be highly sensitive to this report. The equity market is also sensitive to this report because it is the first clue on the nation's manufacturing sector, reported in advance of the Philadelphia Fed's business outlook survey.