The July NY manufacturing index fell 10 pts m/o/m to 9.8 and that was below the estimate of 15. That happens to be around the average over the past 3 months of 9.5 but which is slightly below the 6 month average of 11.5. Before the election it printed -5.5 in October and bounced to 2.2 in November. New orders fell almost 5 pts to 13.3 and backlogs dropped by more than 9 pts to back below 50 at -4.7. Shipments halved, giving back all of the jump in June. Employment dropped by 3.8 pts to a 5 month low at 3.9 while the Workweek was zero, down from 8.5. Inventories dropped by 5.3 pts to 2.4. Prices paid and received both rose a touch m/o/m. Looking forward, the 6 month business activity outlook fell by almost 7 pts to 34.9, the weakest since November. Disappointingly, capital spending plans fell 5.8 pts and almost giving back all of June’s rise. At 15, it is 5.5 pts below the 6 month average. Spending on technology was little changed.
Bottom line, in July “Business activity grew modestly in New York State” according to the NY Fed. What’s also clear is that the jumps in both business and consumer confidence indices that occurred right after the election continues to cool as the reality of the actual performance of the economy brings gravity to those numbers. As this is the first July industrial number to get released, it is not showing any acceleration in the first month of Q3 after what turned out to be a soft Q1 GDP and most likely a lame rebound in Q2. The Philly region gets reported on Thursday.
THE 6 MONTH OUTLOOK IN BUSINESS ACTIVITY