Empire State manufacturing hits best level in eight months
Manufacturing activity in the New York Fed’s jurisdiction unexpectedly improved in June, according to data released on Friday.
The New York Fed’s Empire State index rose to 25 from 20.1 in May, surpassing expectations for a reading of 18.8 and hitting the highest level since October.
According to the survey, 38% of respondents said that conditions had improved over the month, while 13% said they had worsened.
The new orders index was up five points to 21.3 and the shipments index rose four points to 23.5. Meanwhile, the shipments index printed at 23.5 in June compared to 19.1 in May and the unfilled orders index rose to 9.3 from 5.0 last month.
After slipping in April, optimism about the six-month outlook increased for a second consecutive month, with the index for future business conditions climbing eight points to 38.9.
Pantheon Macroeconomics' chief US economist Ian Shepherdson said the headline index’s jump to an eight-month high is likely to prove short-lived.
"It dropped by 6.7 points in April, after the announcement of tariffs on steel and aluminium imports, so today's confirmation that the US will impose further tariffs, on some $50bn-worth of Chinese imports, probably will push it down again in July. For now, everything looks strong, with robust readings for orders, shipments, and employment.
"The core message, of strong growth and increasing pressure on prices at the producer level, is consistent with official data. But the prospect of a broadening trade war with China is raising the risk that the momentum in growth won't be sustained."