Empire Fed Manufacturing Survey: September Surge to October Plummet - Analysis and Insights
Empire Fed Manufacturing Plummets from 30-Month Peak to 5-Month Nadir
September's Surge and October's Plummet
After a consistent nine-month contraction, the Empire Fed's Manufacturing survey in September witnessed a surge to a 30-month high. This was seen as a positive indication of the effectiveness of Biden's economic policies. However, the scenario in October presents a stark contrast as the survey plummeted from +11.5 to -11.9, marking the lowest point since May. This represents the most significant month-on-month drop since January.
Details of the Survey
According to Bloomberg, the current new orders measure witnessed a nearly 20-point drop to -10.2 after reaching its highest point since April 2023 in the previous month. The shipments index also saw a decrease of almost 21 points to -2.7. However, the employment index rebounded to 4.1, marking the first expansion in a year, while the hours worked measure also saw an increase.
Prices Paid and Received
In the meantime, the New York Fed's gauge of prices paid for materials rose to a six-month high of 29. Similarly, the index of prices received by state manufacturers also accelerated.
Outlook for Overall Activity
In a somewhat confusing development, the six-month outlook for overall activity rose to a three-year high of 38.7. This suggests that the state's manufacturers are becoming more optimistic about the economy's prospects.
Bottom Line
The drastic drop in the Empire Fed's Manufacturing survey in October, following a surge in September, presents a complex picture of the state of manufacturing in New York. While there are positive signs such as the rebound in the employment index and an optimistic outlook for overall activity, the significant drop in new orders and shipments indices cannot be overlooked. What is your take on these developments? Do you think this volatility is a cause for concern or simply a temporary fluctuation? Share your thoughts and this article with your friends. Remember, you can sign up for the Daily Briefing, which is delivered every day at 6 pm.
