The New York Federal Reserve’s Empire State Manufacturing Report for September was a real downer.
Factory executives in the New York Fed’s district were less optimistic about the future. The gauge measuring the outlook six months from now fell to 19.4 from 27.2.
The October Empire State Manufacturing Survey indicates that conditions for New York manufacturers continued to decline for a third consecutive month. The general business conditions index increased four points but remained negative at -6.2. The new orders index rose five points to -9.0, while the shipments index fell nine points to -6.4, its first negative reading in more than a year. The prices paid index was little changed at 17.2, and the prices received index held steady at 4.3.
Meanwhile employment in the sector weakened, with the index for number of employees declining five points to -1.1 and the average workweek index falling three points to -4.3. Indexes for the six-month outlook suggested that conditions were expected to improve, although the level of optimism among manufacturers remained low relative to earlier this year.
Slowing global growth is cutting into overseas demand for U.S.-made goods. The International Monetary Fund this month cut its global growth forecasts as the euro area’s debt crisis intensifies and warned of even slower expansion unless officials in the U.S. and Europe address threats to their economies.
The world economy will grow 3.3 percent this year, the slowest since the 2009 recession, and 3.6 percent next year, the IMF said, compared with July predictions of 3.5 percent in 2012 and 3.9 percent in 2013.
The U.S. trade deficit widened in August as exports dropped, Commerce Department figures showed last week. The gap grew 4.1 percent to $44.2 billion from $42.5 billion in July, Exports decreased to the lowest level since February.