‘We have been expecting some cooling in the manufacturing sector following a solid start to the year, but if the orders index proves to be a reliable forward-looking indicator, the slowdown could be more severe than we had been anticipating.’ – Daniel Silver, JP Morgan
Manufacturing activity in the New York state deteriorated unexpectedly in May, falling into the negative territory for the first time since October, official figures revealed. The regional Federal Reserve reported on Monday that its Empire State Manufacturing Index came in at –1.0 in the reported month, following the preceding month’s 5.2 points. Meanwhile, market analysts anticipated a climb to 7.2 in May. The drop may be a sign of an activity slowdown in the manufacturing sector. Back in February, the New York Fed Index hit 18.7 points, the highest level since September 2014, boosted by optimism over the US President Donald Trump’s pro-growth initiatives. However, the following Trump momentum began to wane, as the White House failed to deliver on key promises. The New Orders Index came in at -4.4, down from April’s 7.0 and marking the weakest level since September. The Employment Index declined slightly to 11.9 from 13.9 points registered in the prior month. Indexes assessing the six-month outlook was little changed, falling from 39.9 to 39.13 points in May.
