Empire State manufacturing index ticks up in August

Business conditions in the New York region unexpectedly picked up in August, according to a survey from the NY Fed.

The Empire State manufacturing index rose to 25.6 from 22.6 in July, beating expectations for a reading of 20.0. The survey found that 42% of respondents reported an improvement in conditions over the month while 16% reported a worsening.

The new orders index fell to 17.1 in August from 18.2 the month before, while the shipments index rose to 25.7 from 14.6 and the inventories index increased to 0.0 from -4.3 in July. The unfilled orders gauge rose to 11.1 from 0.0 the month before and the delivery time index came in at 10.4 from 6.0 in July.

Meanwhile, optimism about the six-month outlook improved, with the index for future business conditions up four points to 34.8.

Ian Shepherdson, chief economist at Pantheon Macroeconomics, said: "The key new orders index didn't follow the headline up, dipping instead by 1.1 points, and employment fell 4.1 points. But shipments rocketed by 11.1 points and delivery times and workweek rose too.

"Overall, the weighted sum of the components, which has been a decent guide to the ISM manufacturing index in recent months, suggests that the latter will rise to about 59 in August from 58.1 in July. The trend has peaked, but the index remains at a very high level and is not trending down. That will change, though, if the administration imposes its threatened tariffs on a wide range of imports from China."