Empire State Rebounds—Mixed Signals: Orders Up, Jobs Down
Factory activity in New York began to show signs of life at the start of the year, but the manufacturing labor market is actually showing signs of weakening. The Empire State Manufacturing Survey for January noted improvements in orders and deliveries, while selling price pressures slowed to their lowest point in almost a year.
The New York Fed's general business conditions index jumped 11.4 points to 7.7 in January—returning to expansionary territory (above 0) after a slight dip into negative territory in December. This strengthening was driven by a recovery in new orders and a surge in shipments, indicating improved demand and distribution flows at the start of the quarter.
However, the same report revealed a fragile side: the number of employees indicator fell sharply to -9.0, its lowest level in two years, and average hours worked also shrank. This means that despite the increase in activity, factories have not been aggressively adding workers.
On the price side, input cost pressures remain. Prices paid remained high at 42.8, indicating that rising raw material costs have not fully abated. But the good news is that companies' ability to raise prices to customers is starting to weaken: prices received fell 11 points to 14.4, the lowest since February 2025—indicating a slowing pace of selling price increases.
Regarding the outlook, business operators remain relatively optimistic. The six-month future business conditions index fell 3.2 points to 30.3, but still indicates expectations of improvement, with many respondents expecting conditions to improve. This survey was collected between January 2 and 9.
Source: Newsmaker.id
