The general business conditions index in the New York Fed’s Empire State Survey of Manufacturing pointed to a mild improvement in February, rising to 8.8 from 3.9 in January. The reading is consistent with modest expansion. The past three months have indicated a reset to a lower pace of activity for the District’s factory sector. Expansion remains, but only consistent with moderate overall economic growth. The future index rebounded to 32.3 in February from 17.8 in January but even so is less confident than much of 2018.
February saw a firming in new orders (7.5 compared to 3.5 in January), although still slower than at any time in a year and a half. Unfilled orders continued to decline for a third month, if at a slower pace (-0.7 compared to -7.6). Shipments moderated (10.4 compared to 17.9), trending lower for a fourth month. Employment remained expansionary but is losing momentum (4.1 compared to 7.4), as was true for the workweek (2.5 compared to 6.8). Inventories remained in contraction for a second month in a row (-1.4 compared to -7.6). Delivery times returned to a positive that was more in line with recent months (5.0 compared to -2.1).
Prices paid continued to ease at 27.1 in February, its lowest since 24.6 in November 2017. Falling energy prices and less upward momentum in other commodities account for much of the decrease. On the other hand, prices received were rising faster at 22.9 in February from 13.1 in January as businesses pass on increased costs from earlier months.
The NY-ISM equivalent index was up to 52.6 in February from 51.9 in January, and points to a little firming in conditions at the national level.
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