The Empire Manufacturing report put out by the New York Fed came in slightly stronger than expected in October, rising to a level of 21.1 from 19.0 and expectations for an increase to 20.0. The headline index for this report has now been positive for 24 straight months, which is the longest streak of positive readings since the 32-month streak that ended in January 2008. While the index of current General Business conditions rebounded this month, expectations pulled back for the second straight month.
The internals of this month’s report were generally weak. In terms of current conditions, both New Orders and Shipments saw increases, but every other component declined including both Prices Paid and Prices Received as well as Number of Employees and Average Workweek. The outlook for Manufacturers was also skewed to the downside. While New Orders saw a slight increase, Shipments actually declined.
Another not so positive aspect of the October Empire Manufacturing report was the section about plans for Cap Ex and Technology Spending. Both of these indices declined in October. In the case of Cap Ex, that index dropped to its lowest level since August 2017, while the index for expected Technology Spending dropped to its lowest level since March 2017.