This morning, the New York Federal Reserve Bank released its monthly “Empire Index” of business and manufacturing activity for New York and New Jersey. Last month, the index showed a -5 rating, signaling a weakening economy. (Anything below 0 signals contraction in the economy.) Analysts had expected the index to improve to a -2 rating. Instead, the index collapsed to more than -10, indicating a sharp economic pullback in the region.
(Reuters) – Factory activity in New York state contracted for a second month in a row in September, falling to its lowest level in nearly 3-1/2 years as new orders shrank further, a report from the New York Federal Reserve showed on Monday.
The New York Fed’s “Empire State” general business conditions index dropped to minus 10.41, from minus 5.85 in August, frustrating economists’ forecasts for an improvement to minus 2, according to a Reuters poll. It was the lowest level since April 2009.
The survey of manufacturing plants in the state is one of the earliest monthly guideposts to U.S. factory conditions. The sector contracted in August for the first time in 10 months.
A major contributor to the U.S. recovery as the economy emerged from recession, manufacturing has been faltering in recent months.
Keep in mind, April 2009 was in the midst of the recession. The recession would officially end and the economic “recovery” begin just a few months after hitting this low. That it is again hitting this low suggests the economy is starting to give back any gains its had over the past three years.
Any economic recovery we enjoyed was always very weak by historical standards. Especially, considering how far the economy had fallen during the recession. Now, even a very weak recovery seems to be an illusion.