Empire State manufacturing index fell unexpectedly to the negative 10.4 in September, the weakest reading in almost two years, said the Federal Reserve Bank of New York. The decline was surprising.
Most economists had expected the index to improve to 0.0 from the negative 9.5 in August. The index fell sharply during the summer, after reaching 17.1 in May.
The main sub-index of new orders fell to the negative 14.0 in September from the negative 5.5 in August. The outstanding orders, the other component with future perspective, fell to the negative 14.9 in September compared to the negative 10.6 in August. The only bright spot was the increase of the key barometer of the future activity that asks manufacturers about their expectations six months ahead.
The data from the Empire State are closely monitored, because they are the first reading of the well-being of the manufacturing sector in September.
Manufacturing activity slowed to a crawl over the past few months, because the global economy slows down and factory owners are uncertain about the future level of tax rates in the United States.