Tags: NY | Fed | Manufacturing | Activity | Grows

NY Manufacturing Falls Short of Forecast, Proving Economy Losing More Steam

Monday, 16 Aug 2010 10:02 AM

A gauge of U.S. regional manufacturing rose in August after plunging the previous month, but it fell short of forecasts and contained some grim details, adding to evidence the U.S. recovery is losing momentum.

The New York Federal Reserve said on Monday that its "Empire State" general business conditions index increased to 7.10 in August from 5.08 in July. The figure was below the 8.00 expected by economists polled by Reuters.

Despite this month's small rise, the index remains well below its recent high near 32 reached in April. The report is consistent with other recent data showing the U.S. economy has slowed considerably in the past few months, though most economists say a double-dip recession remains unlikely.

"While I don't take the view that the economy is faltering, what's happening out there is that there is not a lot of growth out there," said Joel Naroff, president, Naroff Economic Advisors in Holland, Pa.

U.S. stock futures briefly dipped after the data before rebounding. Wall Street was under selling pressure on Monday amid worries about the strength of the global economy.

Japan's economic growth slowed to a crawl in the second quarter, with gross domestic product growth of 0.1 percent that translates to annualized expansion of 0.4 percent. This was well below the median market forecast of 2.3 percent and the United States' 2.4 percent annualized growth in the same quarter.

The U.S. Treasury bond market, considered a safe-haven during times of economic uncertainty, rallied on Monday as worries over the global outlook dampened inflation expectations and tempted investors into longer-dated bonds. Yields — which move in the opposite direction to the price — on 10- and 30-year securities fell to their lowest levels since early 2009.

The Empire State report showed employment improved. The index for the number of employees rose to 14.29 in August from 7.94 in July. The average employee workweek index jumped to 7.14 from -9.52.

The new orders index, however, fell below zero for the first time since June 2009.

The index of business conditions six months ahead fell to 35.71, the lowest since July 2009, from 41.27 in July.

"On balance, I don't think that this type of data is going to do anything to inspire investors or to ease concerns about the loss of momentum in the U.S. economy," said Omer Esiner, chief market analyst at Commonwealth Foreign Exchange in Washington.

© 2017 Thomson/Reuters. All rights reserved.

 
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A gauge of U.S. regional manufacturing rose in August after plunging the previous month, but it fell short of forecasts and contained some grim details, adding to evidence the U.S. recovery is losing momentum. The New York Federal Reserve said on Monday that its Empire...
NY,Fed,Manufacturing,Activity,Grows
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2010-02-16
Monday, 16 Aug 2010 10:02 AM
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