NY Fed factory index slips in August

The headline activity index fell from a reading of 17.2 for July to 3.7 (consensus: 14.5), while the key sub-index tied to new orders fell from 13.9 to -1.7.

Shipments also slowed with a sub-index tracking those retreating from 18.5 to 6.7.

Hiring on the other hand improved a tad, with the sub-index referencing staffing levels rising from 0.4 to 2.4.

Yet another sub-index, for the average employee workweek, fell from -2.6 to -6.8.

"The manufacturing recovery will settle into a slower path than the immediate partial snap back that’s been spurred largely by reopenings," said Oren Klachin and Gregory Daco at Oxford Economics.

"The recent surge in coronavirus cases and subsequent pause of reopening plans in many states highlights that the virus’ trajectory will dictate the strength of the recovery from the pandemic shock. Soft demand, supply chain disruptions, and high uncertainty are set to persistently constrain the manufacturing rebound until a health solution for the virus is found. Our baseline forecast foresees manufacturing not returning to pre-virus levels of activity until 2022."