The numbers: The New York Fed's Empire State business conditions index, a gauge of manufacturing activity in the state, fell 42.4 points to negative 31.3 in August, the regional Fed said Monday.
This is the second largest monthly decline on record and among the lowest levels in the survey's history, according to the regional Fed bank.
According to a survey by The Wall Street Journal, economists had predicted a reading of 5.0. Any reading below zero indicates deteriorating conditions. The index for new orders dropped 35.8 points to negative 29.6 in August. Unfilled orders fell for the third month in a row. Labor market conditions weakened. The prices-paid index fell 9 points to 55.5, its lowest level in over a year. The manufacturers were not optimistic about the six-month outlook. The factory index was expecting a little retreat, not a rout, according to the big picture. The U.S. manufacturing sector, which was a strength during the recovery from the Pandemic, is facing a steep drop in new business. The New York data, and a similar reading from the Philadelphia Fed, are seen as early indicators for the health of the factory sector in August. The Institute for Supply Management's barometer of American factories fell to a two-year low of 52.8% in July. Market reaction: Stocks DJIA, SPX, were set to open lower on Monday after China surprised markets with a cut in interest rates.