Manufacturing in the New York region hardly expanded in June as orders and sales cooled, the New York Federal Reserve's Empire State Manufacturing Survey showed Friday.

The general business conditions index dropped to just 2.29 in June from 17.09 in May. That's the lowest level since November 2011 and far below economists' expectations of 13. Employment gauges and indexes for the six-month outlook also declined.

With the U.S. Philadelphia Fed Manufacturing Index having fallen into negative territory last month, Friday's drop in the U.S. Empire State Manufacturing Index is another worrying sign that the slowdown in China and Europe is becoming a larger drag on activity at home.