The April NY manufacturing index unexpectedly rebounded sharply to +10.8 from -24.6 and well better than the estimate of -18. New orders rebounded to +25.1 from -21.7 after shipments rose to +23.9 from -13.4 and backlogs got back to exactly zero after 10 straight months of below zero prints. Inventories jumped too to +8.2 from -1.9. Delivery times rose to zero from -7.6. Prices paid fell again, down to 33 from 41.9 but those received were little changed, up .8 pts. Employment stayed negative at -8 and for a 3rd straight month and the workweek was below zero too for a 5th straight month.
The 6 month business activity outlook rose 3.7 pts m/o/m to 6.6 and for perspective the 6 month average is 5.4. Expectations for both prices paid and received rose while capital spending plans were mixed.
Bottom line, these diffusion indices measure the DIRECTION of change, not the degree so if everyone thinks things will get better, if only slightly, you’d get a sharp rebound in this figure. That said, a rebound is a rebound and it comes off negative prints in 7 of the previous 8 months. Just trying to glean a messaging in the stats, it seems that after very lean backlogs, the lift also helped the rise in new orders but the negative results in employment might question the sustainability of any rebound. We’ll see the Philly index on Thursday to see if it corroborates what NY said.
Treasury yields rose to the highs of the morning in response to the upside surprise and the dollar rallied.
NY Mfr’g
New Orders
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