Business activity declined in New York State for the first time since early in the pandemic, stirring fears that the economy could be heading toward stagflation.
The Federal Reserve Bank of New York’s Empire State Manufacturing Survey suggested that economic activity declined as prices continued to rise in early March. The survey’s index of general business conditions index fell fifteen points to -11.8, its lowest level since May 2020.
Economists had expected the index to rise to a reading of eights after the February score of three.
New orders and shipments declined modestly, while unfilled orders increased. Delivery times continued to lengthen substantially.
The prices paid index remained very elevated, and the prices received index reached yet another record high.
The forward-looking index for inflation showed that businesses expect prices paid for materials and prices paid for finished goods to increase in the months ahead at a faster pace, a sign that inflation continues to gain steam.
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