US: NY Fed index falls sharply in April

In May, the NY Empire State manufacturing index fell back sharply, to its lowest level since December last year. The headline index fell from 21.70 to 11.90, while the consensus was looking for only a slight decline. The details show a more upbeat picture as new orders (17.19 from 22.34) and shipments (25.75 from 28.29) fell only slightly, while all other sub indices even improved. Inventories recovered from -1.28 to 10.75 and also delivery time (2.15 from -1.28) jumped back into positive territory. Average workweek rose sharply from 10.26 to 23.66 and also number of employees improved further (24.78 from 23.08). Finally also inflationary pressures accelerated as prices paid rose from 57.69 to 69.89 and prices received increased from 26.92 to 27.96. The forward-looking index (six months from now) jumped higher too, rising from 47.44 to 52.69. At first sight, the headline index looks awful, but the underlying details show a different picture, with only slight declines in new orders and shipments, while all other indices even improved. We hope that next month’s figure will bring some clarity.