The general business conditions index in the New York Fed's Empire State manufacturing survey is down to minus 8.7 in September after two months of positive readings. The index is below the consensus of 4.3 in the Econoday survey of forecasters. The index for future conditions is down to 14.8 in September. Although it remains positive for the fourth month in a row, it has now fallen for the second month in a row. Current conditions remain unable to sustain upward momentum and the outlook for about six months from now reflects uncertainty.

The main index is a diffusion index and not calculated from components. The details indexes may tell a somewhat different story than the headline. In September, the details suggest a sharp turnaround in activity.

The index for new orders plunged to minus 19.6 in September after 15.4 in August, erasing the gains of the prior two months. The index for unfilled orders continues to contract at minus 6.9 in September after minus 5.5 in August. The index has been in contraction for the past four months and points to no backlogs to keep factories active while new orders are weak. Shipments fell to minus 17.3 in September after 12.2 in August with factories having less finished product to ship out.

The index for delivery times is flat in September showing movement along the supply chain returning to neutral neither too fast nor too slow after two months of picking up steam. The inventories index is slightly less negative at minus 4.9 in September after minus 6.4 in August. The factory sector built up stocks earlier this year when shifts in tariff policy provided an opportunity to buy imports when less heavily taxed.

The prices paid index reflects some easing in upward pressure at 46.1 in September, the lowest since 40.2 in February. However, index readings in 2025 to date remain well above those in 2023 and 2024. The prices received index is down a bit to 21.6 in September after 22.9 in August. The pace of pass-through of higher costs to customers also remains elevated in 2025 compared to the past two years.

The consensus sees the index fading to 4.3 in August from 11.9 in July.

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.