Empire State Manufacturing index plunges more than expected

New York Fed

Manufacturing activity in New York is slowing down more than expected.

The general business conditions index for May came in at -9.02 after spiking to a 15-month high of 9.56 in April. Economists had expected it at 6.50, according to Bloomberg.  

The latest report showed that new orders and shipments declined and their indexes fell below zero. The capital expenditures index fell to its lowest level in over two years. 

"Against the backdrop of an ongoing drag from the strong dollar and reduced oil mining activity, the manufacturing surveys have been choppy lately," said JP Morgan economist Jesse Edgerton in a note.

"This morning's report raises the risk of a renewed downturn in the sector, but we would look for confirmation in other data before changing our outlook."

Employment was little changed, while the work week declined. 

After reporting optimism in April, business owners in New York became less bullish about conditions out to six months. 

"Thursday's release of the Philadelphia Fed survey will provide the next key reading on manufacturing," Edgerton said.

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