The New York Fed’s Empire State Manufacturing Survey was a disappointment.
The headline index climbed to just 0.98 in December from -2.2 in November.
Here’s some more colour from the NY Fed:
…The new orders index inched up, but remained negative at -3.5, while the shipments index rose to 7.7. The unfilled orders index fell to -24.1, and the inventories index declined 20 points to -21.7; both indexes reached their lowest levels since 2009. The prices paid index was little changed at 15.7, and the prices received index climbed to 3.6. Labour market conditions remained weak, with the index for number of employees holding at 0.0 for a second month in a row and the average workweek index dropping six points to -10.8. Indexes for the six-month outlook generally conveyed a fair degree of optimism about future conditions, though to a lesser extent than in the November survey.
According to the report, the biggest concern among employers was benefit costs.
When firms were asked about the extent to which each of these issues was expected to become more or less of a problem over the next year, their responses again put employee benefit costs at the top of the list: 80 per cent of respondents anticipated that this would be more of a problem a year from now. Finding qualified workers and government regulation were also seen as becoming increasingly problematic by a majority of those surveyed. Other categories where pessimists outnumbered optimists by a substantial margin were taxes, employee wage costs, the cost of resources, and the quality of government services. The cost, terms, and availability of credit were not only seen as relatively minor problems now but were also widely expected to be even less of a problem a year from now.
Head to NewYorkFed.org for the whole report.
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