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US: Empire State Manufacturing Index
| Consensus | Consensus Range | Actual | Previous | |
| Index | 7.0 | 2.0 to 10.1 | 7.1 | 7.7 |
Highlights
The New York Fed's Empire State manufacturing survey shows the current conditions index at 7.1 in February, little changed from 7.7 in January and in line with the consensus of 7.0 in the Econoday survey of forecasters. The report suggests that modest expansion for the region's factory sector is more stable and at least for the moment has support from incoming orders. The index for future conditions is up to 34.7 in February from 30.3 in February.
The index for new orders remains positive, although a bit slower at 5.8 in February from 6.6 in January. The order backlogs index is up to 9.1 in February from minus 8.2 in January and is the first expansionary reading since 4.8 in May. Having some orders in the pipeline will help maintain activity going forward. The index for shipments falls to minus 1.0 in February after 16.3 in January. This could be an artifact of the extreme cold in the Northeast that is delaying some shipping. The delivery times index shows longer times along the supply chain at 4.0 in February after 0.0 (zero) in January. The inventory index is up to 7.1 in February after minus 2.1 in January.
The index for prices paid is up to 49.1 in February from 42.8 in January. The index for prices received is up to 22.2 in February from 14.4 in the prior month. There are still some upward price pressures that may be related to higher tariffs and/or short supplies. Manufacturers will still be passing at least some of this on to customers.
Market Consensus Before Announcement
The consensus sees the index nearly unchanged at 7.0 for February versus 7.7 in January. That suggests continued modest growth.
Definition
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.
Description
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.
