Business activity in New York State “took a sharp turn downward” in June, the New York Fed said Monday.
“Manufacturing firms in New York State reported that business activity declined,” the Fed said, reporting the results of its Empire State manufacturing survey for June.
The New York Fed’s Empire State business conditions index took fell into negative territory for the first time in more than two years. The index fell 26.4 points to negative 8.6, the largest ever decline.
Economists had expected a positive 10 result, according to Econoday. Any reading below zero indicates a contraction in activity.
The index for employment fell eight points to -3.5, its first negative showing in over two years, indicating a small decline in employment levels.
Manufacturing has stumbled this year, with several regional Fed surveys and industrial production figures coming in weak. The New York Fed had posted a rebound in May but that was short-lived. Global sluggishness appears to be weighing on exports, which in turn is a drag on the manufacturing sector. Early June also so a big uptick in trade tensions as the U.S. threatened Mexico with tariffs.