The economy of New York state continued to stumble in December as the pandemic surged and new restrictions were placed on businesses in the state with the third largest economy in the U.S.
The Federal Reserve Bank of New York said its Empire State Manufacturing Index’s gauge of general business conditions slid in December to 4.9 rom 6.3. Economists had forecast the index to decline to 5.8. Despite the decline in the general conditions index, the score remains in positive territory, an indication that business activity increased slightly in December.
Employment posted its strongest gain in months, as the share of manufacturing businesses reporting smaller workforces declined from 10.8 percent to 6.3 percent. The share reporting larger workforces ticked up to 20.5 from 20.2 percent. The average workweek lengthened somewhat.
New orders rose in the month and shipments were “marginally higher,” the New York Fed said.
Inventories continued to fall, which may be a sign that businesses anticipate a decline in demand as tighter restrictions and lockdowns take hold. Input prices increased at their fastest pace in two years. Prices received held steady, indicating a very modest pace of price increases.
The measure of expectations for new orders and shipments were positive and similar to last month’s readings. Employment levels and the average workweek are expected to continue to rise in the months ahead. The indexes for future prices paid and prices received both rose for a third consecutive month.
The forward-looking capital expenditures index dipped. The plans for technology spending index fell as fewer firms reported plans to increase spending and more reported plans to shrink spending.
New York is the third largest state in the U.S. measured by GDP, after California and Texas. It has the highest GDP per capita after Washington, D.C.