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New York Fed's Empire State Survey drops to 24.6 in March

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(Kitco News) - Recession fears are not expected to abate anytime soon as the U.S. manufacturing sector remains exceptionally volatile, following another wild swing within the New York region, according to the latest data from the New York Federal Reserve.

Tuesday, the regional central bank said that its Empire State manufacturing survey's general business conditions index fell to -24.6 in March, down from February's negative reading at 5.8. The data significantly missed expectations as economists were looking for the index to fall to -7.9.

In January, activity in the New York region fell to its lowest level since 2020, when the global economy ground to a halt due to the COVID-19 pandemic.

The disappointing data is creating some new momentum for the gold market as prices continue to trade near session highs. Spot gold futures last traded at $1,929.40 an ounce, up more than 1% on the day.

Not only has activity significantly weakened this past month, but the report said that respondents in the latest survey do not expect conditions to improve within the next six months.

Looking at the survey's components, the New Orders Index fell to -21.7, down from February's reading of -7.8; at the same time, the Shipments Index dropped to -13.4, down from the previous reading of 0.1.

The report also noted renewed weakness in the labor market. The Number of Employees Index dropped to -10.1, down from February's reading of -6.6.

Although recession fears have been elevated, the weakness is helping to cool rising inflation. The report said the Price Paid Index fell to 41.9, down from the previous reading of 45.0.

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