RTTNews - Conditions for New York manufacturers have continued to deteriorate in the month of June, according to a report released by the New York Federal Reserve on Monday, with the index of activity in the sector falling by much more than expected.
The New York Fed said its general business conditions index fell to a negative 9.41 in June from a negative 4.55 in May, with a negative reading indicating a deterioration in conditions. Economists had expected the index to edge down to a negative 5.10.
While the index fell by more than economists had been expecting, it remains well above the record low of negative 38.2 set in March.
A downturn in shipments contributed to the continued deterioration, with the shipments index falling to a negative 4.84 in June from a positive 1.29 in May.
The new orders index rose to a negative 8.15 in June from a negative 9.01 in May, indicating a somewhat slower pace of contraction.
Inventories continued to show a notable contraction, with the inventories index falling to a negative 25.29 in June form a negative 21.59 in May.
Peter Boockvar, equity strategist at Miller Tabak said the drop in inventories continues the theme of inventory destocking and the corollary of not seeing inventory stocking yet.
At the same time, the report showed a slowdown in the pace of contraction in prices, as the prices paid index rose to a negative 5.75 in June from a negative 11.36 in May and the prices received index rose to a negative 12.64 from a negative 27.27.
The New York Fed also noted that the future indexes were generally positive and continued to rise, conveying an expectation that conditions should improve over the next six months.
The future general business conditions index rose to 47.81 in June from 43.80 in May, reaching its highest level in nearly two years. The New York Fed said 61 percent of respondents expected conditions to improve over the next six months.
While Boockvar said the June data reflects more stabilization at weak levels rather than improvement, he said the increases by the future indexes reflect the hope that less bad will soon turn to good.
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