A reading of New York-area manufacturing conditions fell swiftly and brutally in August, one that could make the likelihood of an interest-rate hike next month — or even this year — more remote.
The Empire State general business conditions index nose-dived to a reading of negative 14.9, from positive 3.9 in July, marking the worst level since April 2009, the New York Fed said. The index, on a scale where any positive number indicates improving conditions, was far worse than the positive 4.5 forecast in a MarketWatch-compiled economist poll.
It wasn’t just weakness at the headline. The new-orders component sank to negative 15.7 from negative 3.5, and the shipments index sank to negative 13.8 from positive 7.9.
…“Along with this report’s history of volatility, the dichotomy between the fairly solid expectations portion of the survey and the horrendous current conditions portion leads us to be wary of taking the current conditions data at face value, and we would be very surprised to see other manufacturing indicators post similarly weak results in the weeks ahead,” said Josh Shapiro, chief U.S. economist at MFR Inc.
Full article: Empire State index tumbles to recession-era levels (MarketWatch)