The latest report on regional manufacturing activity from the New York Fed came in at -14.92, far below expectations, and the lowest reading in six years.
The consensus forecast among economists polled by Bloomberg was for a general business conditions index reading of 4.50, up from 3.9.
In the survey, 34% of respondents said conditions had worsened, while 19% said they had improved.
The new orders index plunged to -15.7, and the shipments index fell to -13.8.
Employment was flat for the period of the survey.
The index gauging expectations for business conditions in six months increased in July, to 33.64 from 27.04.
In a note to clients after the release, Pantheon Macroeconomics’ Ian Shepherdson wrote, “This is grim.”
He continued, “On the face of it, the Empire State signals a plunge in the national ISM manufacturing index to about 47 from 52.7, but this is unlikely to happen; the ISM is supported by favourable seasonals during the summer. Still, manufacturing is under pressure, and if the Fed is going to hike in September, as we expect, it will have to move in the knowledge that its actions will make a bad situation worse.”
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