WASHINGTON, May 15 (Reuters) - The New York Federal
Reserve said on Monday its barometer of manufacturing activity
in New York State plunged in May, but the survey is extremely
volatile, making it harder to interpret.
The regional Fed's "Empire State" index on current business
conditions plummeted 42.6 points to -31.8 this month. A reading
below zero signals the New York manufacturing sector is
contracting. The slump followed a 35.4 points surge in April,
which had lifted the index to a positive reading of 10.8.
Economists polled by Reuters had forecast the index at -3.75.
Goldman Sachs noted that the survey "has been particularly
volatile since 2022, swinging by at least 20 points in over half
of instances."
Nevertheless, higher interest rates and the rotation of
spending back to services from goods is hurting national
manufacturing activity. Tighter credit conditions are also seen
as a drag. The New York Fed will on Tuesday publish a survey
focusing on credit access and credit conditions.
The Institute for Supply Management's measure of national
manufacturing activity has contracted for six straight months
The New Fed survey's gauge of new orders slumped 53.1 points
this month to -28.0, while the shipments measure dropped 40.3
points to -16.4. Though manufacturing employment continued to
pull off recent lows, it remained depressed. Inflation at the
factory gate continued to slow.
Businesses did not expect a significant improvement in
conditions over 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 by Chizu Nomiyama)
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