Manufacturing conditions in New York once again beat expectations and showed new orders were on the rebound. The NY Fed's Empire State survey jumped 7 points in September to hit +18.9, the highest level since November 2007. Forecasters, surprised by last month’s ascension, were only looking for a moderate 2-point increase this month.
“This is a strong print and we expect a slow upward trajectory in this indicator going forward, though likely not to the same leaps and bounds we have seen over the past two months,” commented Ian Pollick from TD Securities.
New orders advanced to +19.8 in the month, indicating that domestic and foreign demand should be picking up as the fourth quarter gets underway. A 10-point climb in the average workweek to +6.0 also supports that claim, indicating that businesses may be on the verge of restocking inventories.
Consistent with the morning’s Producer Price Index, the costs index rose several points to its highest level in many months, while the prices received index inched upwards to flat levels.
On the whole, the report suggests another gain in the nationwide manufacturing survey from the Institute for Supply Management (ISM), yet not all details were encouraging.
The number of employees index not only remained negative in the month, it declined to -8.3 from -7.5, marking the first drawback since February. Inventories were also a few points worse than before with a -25.0 score. Meanwhile, shipments failed to keep pace with last month as they fell to +5.3 from +14.1.
Those figures are consistent with claims that any return to growth will be shaky at best, but the broad trend is certainly in the right direction.
Looking ahead, executives surveyed in the report were looking for continued improvement. The future business activity index rose 4 points to 52.3, the highest level since 2004.