New York, Philly Fed Surveys Show Tepid Business Climate

Two regional manufacturing surveys out this week indicate weak activity in the sector amid rising prices.

New York Fed: The New York Fed’s Empire State Manufacturing Survey found that manufacturing activity had dropped for the third month in a row in the May survey.  

• “The general business conditions index was similar to last month’s reading at -9.2.”
• Somewhat more encouragingly, however, “The new orders index climbed above zero and, at 7.0, pointed to a modest increase in orders. The shipments index also turned positive, but only just so, and at 3.5, indicated a slight increase in shipments.”

Prices: “The prices paid index climbed for a fifth consecutive month, rising 8 points to 59.0, its highest level in more than two years.”

• However, prices received dropped by 6 points to 22.9, “suggesting that selling price increases slowed somewhat.”

Philly Fed: The Philly Fed’s Manufacturing Business Outlook Survey also found that manufacturing activity was “weak” in its region during May.

• “The diffusion index for current general activity rose from -26.4 to -4.0 in May, paring some of last month’s sharp decline but remaining negative.”
• As for new orders and shipments, “The new orders index rose 42 points to 7.5, offsetting nearly all of April’s decline. The shipments index declined for the fourth consecutive month, falling 4 points to -13.0, its lowest reading since November 2023.”

Prices: This survey’s price indexes hit their highest levels since June 2022, when the recent bout of inflation peaked at nearly 9%. 

• “The prices paid index increased for the sixth consecutive month to 59.8. The current prices received index rose from 30.7 to 43.6.”