New York manufacturing activity in September contracted for the fourth consecutive month as shipments cratered this month, according to the Federal Reserve Bank of New York's Empire State Manufacturing
Survey released Thursday. The Empire State's business conditions index dropped to -8.82 this month from -7.72 in August.
Economists surveyed by Dow Jones Newswires had expected the index to improve to -4.0.
The further decline in the Empire State number will heighten worries about the factory sector at the end of the third quarter. August data was extremely weak, but economists attributed the poor showing to special factors, like uncertainty on fiscal policy and stock market volatility.
The Empire State survey suggests the sluggishness continues into this month. The report said, "19% of respondents said that conditions had improved in September, while 28% said that conditions had deteriorated."
The weak New York reading now raises the focus on the similar factory report coming from the Philadelphia Fed, scheduled for release Thursday at 10:00 a.m. EDT.
Among the Empire subindexes, the shipments and employment indexes were disturbing. The shipments index plunged to -12.88 from 3.01, while the employment index fell to -5.43 from 3.26 in August.
The orders index turned more negative, falling to -8.00 from -7.82.
Inflation pressures rebounded.
After falling more than forty points between May and August, the prices paid index rose to 32.61 from 28.26, while prices received index jumped to 8.70 this month from 2.17 in August.
The report said both movements are "evidence that price increases picked up their pace."
Respondents remain cautious about the future.
The general business conditions expectations index for the next six months rose to 13.04 from 8.70, which was the lowest level since February 2009.
The employee expectations index dropped to 0.00 from 6.52 and the expected hours-worked index worsened to -6.52 from -4.35.
In a series of supplementary questions, manufacturers were asked about past and expected changes in their selling prices. Respondents reported that their selling prices had risen by 1.4%, on average, during the past twelve months and were expected to rise by an average of 1.0% over the next year.
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