US Empire State manufacturing index jumps in April
By Alexander Bueso
Date: Monday 17 Apr 2023
(Sharecast News) - Factory sector activity in the Federal Reserve Bank of New York's district improved sharply in April, the results of a survey revealed.
The so-called Empire State index jumped from a reading of -24.6 in March to 10.8 for April, Dow Jones Newswires reported.
That was a far better outcome than the -18.0 point reading forecast by economists.
A key gauge tracking new orders surged from a reading of -21.7 to 25.1.
In parallel, the sub-index for employment was little changed at -8.0, up from -10.1 during the prior month.
The sub-index for prices received by firms edged up from 22.9 to 23.7.
The N.Y. Fed's second district covers the state of New York, the 12 northern counties of New Jersey, Fairfield County in Connecticut, Puerto Rico, and the US Virgin Islands.
Kieran Clancy, senior US economist at Pantheon Macroeconomics, said that on the fact of it the survey results suggested a "significant" boost to factory activity linked to the re-opening of China's economy.
Nonetheless, he believed such a conclusion would be "very premature", pointing out how the regional Fed surveys were very volatile due to their small sample sizes, that the results were at odds with those from oher surveys such as the NFIB's.
The latter had revealed the largest monthly jump in the proportion of firms reporting that credit was harder to obtain since the financial crisis, he said.
"Capital spending is the lifeblood of U.S. manufacturing activity, and it is set to take an enormous hit as credit conditions tighten."
"Even if the jump [...] is mostly noise, our ISM-style average of the survey's details suggests the manufacturing sector started Q2 on a solid footing," said Michael Pearce, lead US economist at Oxford Economics.
"It is also another indication that any hit to the economy from the banking sector shock will feed through with a significant lag, which will keep the Fed focused on fighting inflation in the near term.
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