The general business conditions index in the New York Fed Empire State survey of manufacturing is softer at minus 16.0 in June after minus 9.2 in May and minus 8.1 in April. The June index is below the consensus of minus 7.0 in the Econoday survey of forecasters. The diffusion index reflects survey respondents' sentiment; it is not calculated from components which may tell a different story. In June, the detail indexes back up the weaker sentiment for current conditions. However, the index for future conditions turned around to 21.2 in June after minus 2.0 in May and minus 7.4 in April. The reading is one anticipating a return to modest expansion about six months from now.

June current conditions show a drop in the new orders index to minus 14.2 in June from 7.0 in May and the unfilled orders index is down to minus 8.3 in June from 4.8 in the prior month. The shipments index falls to minus 7.2 in June from 3.5 in May. The index for delivery times is a bit faster at 1.8 in June from 1.0 in May, but continues to run in a narrow range near neutral for four months in a row. The inventories index indicates that the push to stock up prior to the introduction of punishing tariffs has faded to 0.9 in June from 4.8 in May.

The index for employment is 4.7 in June after minus 5.1 in May and is positive for the first time since January. The index for the workweek remains in contraction at minus 1.5 in June after minus 3.4 in May. The index has been negative since December 2024.

The prices paid index is down to 46.8 in June from 59.0 in May. Renewed upward price pressures that began in February are now abating. The index for prices received is up to 26.6 in June from 22.9 in May. Businesses are passing along increased costs where they can.

The consensus sees the index at minus 7.0 in June, a tiny bit better from minus 9.2 in May and minus 8.1 in April. That suggests slow contraction continued in June as tariff uncertainty lingered.

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.