The Empire State Manufacturing Index dropped 7.6 points to 3.9 in January according to the New York Federal Reserve’s report on Tuesday. The reading is drastically below the projected increase forecast to take the index up to 12.
- The index has now dropped 18 points in the last two months, the lowest reading in over a year.
- While a reading above 0 indicates improving conditions, the December drop was just as unexpected as this month’s decline, leading to industry concerns.
- New orders and shipments both saw reduced activity, as did unfilled orders and inventory indexes.
The new-orders index and shipments gauges continued to increased, but at a reduced pace this month. The new-orders index fell 9.9 points to 3.5, and the shipments index dropped 2.4 points to 17.9. The prices-paid index saw a second month of reduced activity, and the six-month outlook reported by survey respondents was less optimistic than before.
The firms’ outlook has been impacted by the ongoing trade conflict between China and the US as well as the partial government shutdown, with many other business surveys showing similar outlook declines recently.
The report follows recently-released weak ISM Manufacturing Index data, perhaps indicating a broad decline in US manufacturing overall. Meanwhile
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Gold is trading up 0.33% following the news, nearing session highs at $1,293.46/oz. The weakened manufacturing reports of late could be causing traders to look to gold as an alternative to the USD amid concerns regarding an economic slowdown.