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ECON: Empire State Manufacturing Weaker Than Expected
Posted to: Micro News
Monday, December 16, 2013 8:38 AM
- Empire State Index +0.98 vs +4.75 forecast
- Employment Index 0.0 vs 0.0 previously
- Market reaction: barely any so far. The market is dead, with very little trading going on in Treasuries or MBS. The implication of the data would be slightly positive, but while Treasuries have picked up around half a bp, MBS are lower, simply due to illiquidity.
The December 2013 Empire State Manufacturing Survey indicates that manufacturing conditions were flat for New York manufacturers. The general business conditions index rose three points but, at 1.0, indicated that activity changed little over the month. The new orders index inched up, but remained negative at -3.5, while the shipments index rose to 7.7. The unfilled orders index fell to -24.1, and the inventories index declined twenty points to -21.7; both indexes reached their lowest levels since 2009. The prices paid index was little changed at 15.7, and the prices received index climbed to 3.6. Labor market conditions remained weak, with the index for number of employees holding at 0.0 for a second month in a row and the average workweek index dropping six points to -10.8. Indexes for the six-month outlook generally conveyed a fair degree of optimism about future conditions, though to a lesser extent than in the November survey.
This month’s supplementary questions asked manufacturers to assess how much of a problem certain business issues were for their firms and whether the issues were expected to become more or less of a problem in the year ahead. As in earlier surveys, the issue cited most frequently, by far, as a major problem was the cost of employee benefits. Moreover, fully 80 percent of respondents expected that this would become even more of a problem a year from now. Finding qualified workers emerged as the second most widespread problem, eliciting a considerably larger degree of concern than in earlier surveys. This, too, was expected to become more of a problem in the year ahead by a wide margin. In contrast, the availability, cost, and terms of credit were seen as relatively minor problems that would become even less consequential over the next year. For more details, see the full supplemental report.
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