After completely breaking down and falling to its lowest level since April 2009 back in January, the Empire Manufacturing report for the month of February showed a modest improvement, rising from -19.4 up to -16.6. While it’s a slight improvement, we would note that this month’s report was still weaker than expected (10.00) and well below what the consensus forecast was heading into the January report (-4.0) before the headline index broke down. The Empire Manufacturing report has now been in contraction mode for seven straight months, which is the second-longest streak in the history of the index (July 2001) behind only the 17-month streak from February 2008 through June 2009. It is also the 10th month in the last 12 where the report was weaker than expected.
As far as the internals of this month’s report were concerned, the results were mixed. While the levels of all but two components are in contraction territory, the silver lining is that all but two showed m/m improvement. The biggest improvements came in Number of Employees and New Orders while Prices Paid and Prices Received were the only categories that showed a decline. Regarding expectations for the next six months, sentiment also moved in the right direction as just three categories showed m/m declines and Number of Employees and New Orders once again saw the largest increases.