Far beyond expectations! New York Fed: New York State manufacturing sector achieves positive growth for the first time in 2024

As the Federal Reserve is about to cut interest rates, companies have become more optimistic about the future business outlook, New York State's manufacturing activity saw its first growth since November last year in September.

On Monday, September 16th, Eastern Time, the latest survey by the New York Fed showed a significant increase of 16.2 points in the manufacturing index for September, reaching 11.5, the highest level since April 2022, far exceeding analysts' expectations of -5.0 and higher than last month's -4.7.

Looking at the details, both the new orders index and the shipments index reached multi-year highs. The new orders index surged 17.3 points to 9.4 in September, hitting a multi-year high. The shipments index also increased by 17.6 points to 17.9, the highest level in a year and a half. Inventory levels, which had declined for two consecutive months, remained stable this month. The average workweek index also significantly increased by 20.7 points to 2.9, reflecting an increase in production activities.

In addition, the unfilled orders index increased by 9.5 points to 2.1 this month, indicating an increase in market demand. The price index slightly decreased, although it is widely expected that the Federal Reserve will cut interest rates later this week, respondents indicated that the rate of increase in raw material and selling prices has hardly changed, reflecting that inflationary pressures still exist and have not significantly eased.

The bad news is that the future capital expenditure index fell below zero for the first time since 2020, which may indicate that companies are cautious about future investment plans. However, Richard Deitz, an economic research consultant at the New York Fed, stated that despite a slight decrease in the employment rate and persistently weak capital expenditure plans, businesses hold a more optimistic outlook for the improvement of the business environment in the coming months.

The sample collection period for this survey was from September 3rd to September 10th, just before the debate between Vice President Harris and former President Trump. The survey showed that consumer economic confidence is related to political views, with Democratic supporters holding a more optimistic attitude towards the economy, while Republican supporters are relatively pessimistic.

Looking at the national level in the United States, although the ISM manufacturing index in August slightly rebounded to 47.2%, it still remained below the 50% threshold, marking the 21st time in the past 22 months that the index has been in a contraction state