New York Fed Manufacturing Index Tumbles to Lowest in 19 Months

Source: Bloomberg News

Factories in New York state reported a sharp slowdown in business, sending a Federal Reserve index tumbling this month to a 19-month low and adding to signs U.S. economic growth is moderating.

The New York Fed’s Empire State manufacturing index fell 12.4 points to 10.9, according to a report Monday. That’s the lowest level since May 2017 and the biggest one-month decline since May 2016. The figure indicates business activity grew at a slower pace in December than in the prior month.

The gauge is the first of several regional Fed indexes to be reported this month, and may bolster the case for the central bank to be more cautious on interest-rate hikes in 2019 following an expected increase at this week’s meeting. Other gauges from the Philadelphia, Richmond, Kansas City and Dallas district banks will give more detail on factory activity around the U.S.

The Empire State survey showed weaker readings for new orders, shipments and unfilled orders, though the measure of employment jumped to 26.1, a record in data going back to 2001. That figure indicates “very strong growth in employment levels,” the New York Fed said.

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