Empire State manufacturing index drops in November

Manufacturing activity in the New York jurisdiction unexpectedly deteriorated in November, according to a survey released on Monday.

The New York Fed’s Empire State index fell to 6.3 from 10.5 in October, missing consensus expectations for a reading of 13.5.

The new orders index slid to 3.7 in November from 12.3 the month before, while the shipments index fell 11.5 points to 6.3.

The index for future business conditions was steady at 33.9, suggesting that firms remained optimistic.

Ian Shepherdson, chief economist at Pantheon Macroeconomics, said: "This is the second straight disappointment in the Empire State index, suggesting either that it is simply an outlier or that it is capturing something not yet visible in the other regional reports. Our initial thought is that the former is more likely, given robust domestic demand for goods - both consumer and capital - and the sustained recovery in manufacturing in China and elsewhere.

"Note too that all the regional surveys suffer from small sample sizes, so it’s always better to look at the trends rather than single observations. This survey doesn’t alone change the picture of a strong manufacturing upturn."