Courtesy of Mish.
The Empire State manufacturing survey is the first in the series of monthly reports from the Fed regions.
This survey picked up where it last left off, in the red, but deeper.
The Econoday Consensus Estimate for the Empire State survey was +1.00 vs. an actual reading of -6.8.
As is typically the case, economists were too optimistic. the lowest estimate for the survey was 0.00.
Highlights
The first indication on October’s factory conditions is negative. The Empire State index is below zero for a third month in a row, at minus 6.80 vs similar readings in September and August. And the details are almost entirely negative with new orders at minus 5.60 for a second sub-zero score in a row. Shipments are at minus 0.60 with employment in reverse for a fourth straight month, at minus 4.70. Unfilled orders and inventories are almost always in contraction in the Empire State sample and they are again in the October report, in low double digits which is even weaker than usual.
But there are positive signs including life for prices. Input costs rose nearly 6 points to 22.60 which signals the greatest month-to-month pressure in more than 2 years, since September 2014. Pressure also appears in selling prices, which rose nearly 3 points to 4.70 for their best showing since July 2015. The 6-month outlook is also a positive, at a respectable 36.00 though down about 2 points from last month.
Positives aside, the trends in this report are pointing to continued sputtering for manufacturing, a sector that has been flat all year on weak demand for machinery and generally weak demand from overseas.
Positives Aside?
Positives? What positives?
- 24.5% of firms reported an increase in input prices vs. 1.9% reporting lower prices. The net effect is 22.6% of firms reporting a rise in input prices.
- 11.3% of firms reported they received higher prices but 6.6% reported they received lower prices. The net effect on prices received is +4.7%.
- The aggregate net effect is 22.6% of firms have to pay more for manufacturing goods but only 4.7% of the firms could actually raise prices.
It is beyond ludicrous to spin profit pressures and inability to hike prices as positive, but this is how Econoday spins this stuff time and time again.
With that comment out of the way let’s take a peek at the actual Empire State Manufacturing Survey to see what else we can find.
