Empire State manufacturing index plummets in January

The New York Empire State manufacturing index fell to -43.7 in January, according to the Federal Reserve, the lowest reading since May 2020, pointing to a sharp drop in manufacturing activity in the state.

New orders fell to -49.4 and shipments dropped to -31.3, down from -11.3 and -6.4, respectively, while unfilled orders continued to shrink significantly. Delivery times shortened to -8.4 from -15.6, inventories edged lower to -7.4 from -5.2, while employment and the average workweek declined modestly.

Meanwhile, the pace of input price increases rose to 23.2 from 16.7, while the pace of selling price increases was little changed at 9.5). Finally, optimism remained subdued although businesses now expect conditions to improve over the next six months.

The reading follows December's -14.5 print and market expectations for a reading of -5.

Reporting by Iain Gilbert at Sharecast.com