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Updated: Empire State Manufacturing Index Falls 21 Points To 6.2 In October
By Kitco NewsWednesday October 15, 2014 8:30 AM
Editor's Note: The article was updated to include more information from the report and comments from CIBC.
(Kitco News) -The Empire State manufacturing survey shows that business conditions in New York weakened significantly in October, giving back all of the gains seen last month, the New York Federal Reserve said Monday.
The general business conditions index in the manufacturing gauge fell 21 points in October to a reading of 6.2, compared to September’s reading of 27.5. According to consensus estimates, economists were expecting to see a modest pullback in the region’s manufacturing sector and were forecasting a reading of about 20.3.
Looking at some of the components of the report, the new orders index dropped 19 points and fell into negative territory with a reading of -1.7. At the same time, the shipment index dropped 26 points to 1.1.
However the one bright spot in the survey was the employment index, which rose 7 points to 10.2, “pointing to an increase in employment levels."
The survey also showed that price pressures remained subdued as both the input prices index and selling prices index both fell to 11.4 and 6.8, respectively.
The report added that the outlook also weakened as the index for future general business conditions fell five points to 41.7; future new orders index fell three points to 42.3.
"“Nevertheless, they remained fairly high by historical standards, and conveyed an expectation that activity would continue to grow in the months ahead,” the report said.
The New York Fed survey is the first regional survey to be released this month; however, later in the day markets will receive anecdotal reports from all the districts in the Federal Reserve’s Beige Book.
Andrew Grantham, senior economist from CIBC World Markets, dismissed the much weaker than expected survey, saying that “the headline figure in that survey can be sentiment driven and prone to volatility.”
By Neils Christensen of Kitco News; nchristensen@kitco.com
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