NumbersThe Federal Reserve Bank of New York's Empire State business conditions index, a measure of manufacturing activity in the state, fell 29.2 points in January to negative 43.7, the regional Federal Reserve said Tuesday.
This is the lowest level since the depth of the epidemic in May 2020.
Economists had expected a negative reading of 4, according to a Wall Street Journal survey.
Any reading below zero indicates deteriorating conditions.
Over the past two months, the index has fallen by 58.2 points.
Key details: The new orders index fell 38.1 points to negative 49.4 in January. Shipments fell 24.9 points to negative 31.3 points.
Incomplete orders continued to shrink dramatically and delivery times shortened. Staffing and working hours are also contracted.
Optimism rose but was subdued. The future business conditions index rose 7 points to 18.8. Capital spending rose 10 points to 13.7.
The Big Picture: This sudden decline adds doubts about the US manufacturing sector, which has been suffering over the past year with rising interest rates. The main ISM industrial index shows that the sector has contracted for 14 months in a row.
What the Federal Reserve Bank of New York said: “This significant decline indicates that January was a difficult month for New York manufacturers, with employment and working hours also contracting,” said Richard Dietz, economic research adviser at the Federal Reserve Bank of New York.
Market reaction: DJIA SPX shares are set to open lower on Tuesday while the 10-year Treasury yield BX:TMUBMUSD10Y rose to 4% in early morning trading.
“Devoted student. Bacon advocate. Beer scholar. Troublemaker. Falls down a lot. Typical coffee enthusiast.”