NY Fed’s Manufacturing Survey Crashes to Lowest Level Since Mid-2017

The New York Fed’s manufacturing survey saw evidence in December of the weakest growth since mid-2017.

The New Fed said Tuesday that its Empire State manufacturing index fell 7.6 points to 3.9 in January, the lowest reading since the summer of 2017. Economists had expected the index to rise to 12. Since November, the survey has fallen 18 points.

Despite the decline, the survey indicates manufacturing continues to expand in New York, albeit at a slower rate. Any reading above zero indicates growth

The new orders index, the most forward-looking part of the survey, fell ten points to 3.5, suggesting that growth in orders slowed significantly, while the shipments index was little changed at 17.9. That likely points to a slowdown in 2019.

Analysts point to the trade war and the government shutdown as possible sources of the slowdown. Others, however, say it merely relfects a cooling off from the hotter than expected growth in 2018. Still others attribute it to the victory of the Democrats in the November’s House elections, which produced a divided government that some fear may be unable to pursue further Donald Trump’s pro-growth agenda.

It’s not clear whether the NY Fed survey is a bellwether for manufacturing across the country. It is a relatively new survey, New York State has a unique economy, and the past record of the survey as an indicator of broader economic conditions is quite mixed.