New York Fed’s Empire State Business Index Surprises Economists, Soaring to 10.8 in April

Highlights

• New York Fed’s Empire State business index jumps 35.4 points to 10.8 in April
• The index for new orders and shipments surged 46.8 and 37.3 points respectively
• Despite the improvement, employment and hours worked declined for the third straight month.

Overview

The New York Fed’s Empire State business conditions index, which measures manufacturing activity in the state, surged by 35.4 points to 10.8 in April, beating economists’ expectations of a negative 15 reading.

The index for new orders and shipments also saw significant increases, but employment and hours worked declined for the third straight month.

Selling prices remained the same as last month, and firms do not anticipate much improvement in conditions over the next six months. This positive report is the first of the regional Fed reports, indicating some life in the manufacturing sector after a period of weakness.

However, some economists are concerned that a tightening of credit conditions triggered by the failure of Silicon Valley Bank could harm the industry.

Empire State Business Index Overview

The New York Fed’s Empire State Business Index, also known as the Empire State Manufacturing Survey, is a monthly report published by the Federal Reserve Bank of New York. The survey measures the business conditions and general manufacturing activity in the New York state region, which is part of the Second District of the Federal Reserve System.

A positive index indicates that manufacturing activity is expanding, while a negative value suggests a contraction. Economists and investors closely watch the Empire State Business Index, as it is seen as an early indicator of the overall health of the U.S. manufacturing sector and can provide insights into broader economic trends.

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