© Reuters. FILE PHOTO: Jewelry workers are seen in a workshop at RFG Manufacturing’s Riviera jewelry design facility in Manhattan in New York City
WASHINGTON (Reuters) – The New York Federal Reserve Bank reported on Monday that its barometer of manufacturing activity in New York state plunged in May, but the survey is extremely volatile, making it difficult to interpret.
The regional Fed’s “Empire State” index of current business conditions plunged 42.6 points to -31.8 this month. A reading below zero indicates that the New York manufacturing sector is contracting.
The plunge came after a 35.4-point rise in April, which had lifted the index to a positive reading of 10.8. Economists polled by Reuters had forecast an index of -3.75.
Goldman Sachs (NYSE:) noted that the survey “has been particularly volatile since 2022, swinging at least 20 points in more than half of the cases.”
However, the rise in interest rates and the shift in spending from goods to services are hurting national manufacturing activity. Tightening credit conditions are also seen as a drag.
The New York Federal Reserve will publish a survey on Tuesday focused on access to credit and credit conditions.
The Fed’s survey gauge for new orders plunged 53.1 points this month to -28.0, while shipments fell 40.3 points to -16.4.
Although employment in the manufacturing sector continued to recover from its recent lows, it remained at low levels. Factory inflation continued to slow.
Companies do not expect a significant improvement in the situation in the next six months. The survey’s measure of future business conditions rose to 9.8 from 6.6 in April.
(Reporting by Lucia Mutikani. Editing in Spanish by Javier Leira)
2023-05-15 15:24:00
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