(Kitco News) - Manufacturing activity in the New York region showed continued weakness this month even as inflation pressures eased, according to the latest figures published by the New York Federal Reserve.
The regional central bank said on Wednesday that its Empire State manufacturing survey declined to -15.6 in May, after coming in at -14.3 in April. The data was worse than expected, as consensus forecasts called for a -10 reading.
“Manufacturing activity continued to contract in New York State in April, and employment continued to decline,” said Richard Deitz, Economic Research Advisor at the New York Fed. “Optimism about the outlook for future business conditions remained subdued.”
Gold prices shot to session highs following the 8:30 am EDT release, which came out at the same time as the U.S. CPI and Retail Sales reports, and the precious metal continues to trade near the top of its daily range.
Spot gold last traded at $2374.11 per ounce at the time of writing, and is up 0.69% on the day.
The components of the report showed weakness in most areas of the region’s manufacturing sector.
The new orders index was unchanged at -16.5, the report said, indicating “an ongoing significant decline” in orders, while the shipments index improved slightly to -1.2.
“The inventories index came in at 2.0, indicating that inventories were steady, and the delivery times index inched down to -9.1, suggesting that delivery times shortened,” the New York Fed said. “The index for number of employees came in at -6.4, and the average workweek index moved up to -5.8, pointing to an ongoing decline in employment levels and hours worked.”
The report showed that optimism about the outlook remained subdued. “The index for future business conditions dipped five points to 16.7, with only 37 percent of respondents expecting conditions to improve in the next six months,” they wrote. “The outlook for employment growth weakened noticeably. The capital spending index fell to 6.7, suggesting that capital spending plans remained soft.”
The report did show some easing of inflation pressures. “The prices paid index retreated five points to 28.3, and the prices received index declined three points to 14.1, indicating that price increases moderated slightly,” they said.
The moderating inflation numbers are seen as a positive for gold as they could enable the Federal Reserve to ease its restrictive monetary policies and advance the timing of rate cuts.
