Thursday, October 15, 2015

Earlier: Philly and NY Fed Manufacturing Surveys showed contraction in October

by Bill McBride on 10/15/2015 03:19:00 PM

From the Philly Fed: October Manufacturing Survey

Manufacturing conditions in the region continued to weaken in October, according to firms responding to this month’s Manufacturing Business Outlook Survey. The indicator for general activity remained negative, while the new orders and shipments indexes turned negative this month. Labor market indicators also weakened.
...
he diffusion index for current activity remained negative for the second consecutive month, although it edged slightly higher from -6.0 in September to -4.5...

The survey’s indicators for labor market conditions suggest slightly weaker employment. The percentage of firms reporting declines in employment (15 percent) was slightly greater than the percentage reporting increases (13 percent). The employment index declined nearly 12 points, from 10.2 to -1.7.
emphasis added
This was below the consensus forecast of a reading of -1.0 for October.

From the NY Fed: October 2015 Empire State Manufacturing Survey
Business activity declined for a third consecutive month for New York manufacturers, according to the October 2015 survey. The general business conditions index edged up three points to -11.4, marking three straight months of readings below -10, the first such occurrence since 2009.

The index for number of employees fell for a fourth consecutive month, slipping two points to -8.5 in a sign that employment levels were lower. The average workweek index remained negative at -7.6, pointing to shorter workweeks.

ISM PMI Click on graph for larger image.

Here is a graph comparing the regional Fed surveys and the ISM manufacturing index. The yellow line is an average of the NY Fed (Empire State) and Philly Fed surveys through October. The ISM and total Fed surveys are through September.

The average of the Empire State and Philly Fed surveys increased in September, but was still negative.  This suggests another weak reading for the ISM survey.