Manufacturing in New York State expanded in August at a slower pace than projected as more factories reported declining orders, indicating the coronavirus continues to limit momentum in the recovery.
The Federal Reserve Bank of New York’s general business conditions index dropped to 3.7 from a reading of 17.2 a month earlier that was the strongest since November 2018, a report out Monday showed. The median projection in a Bloomberg survey of economists called for the overall gauge to ease to 15.
A reading above zero indicates expansion, and the measure has rebounded sharply since plunging in April to an all-time low of minus 78.2. The Empire State report is the first of several regional Fed manufacturing indexes to be released this month.
Nearly 34% of respondents said that business conditions are improving, while about 30% said activity was declining. The bank’s gauge of new orders fell to minus 1.7 from 13.9 and the shipments index dropped to 6.7 from 18.5. A measure of the number of employees improved by 2 points to 2.4 in August.
Optimism among New York manufacturers about economic conditions over the next six months cooled. The regional Fed bank’s future index decreased to 34.3 from 38.4.
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