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The numbers: The New York Fed’s Empire State business conditions index shot up 25.6 points to a record-high reading of 43 in July, the regional Fed bank said Thursday. Economists had expected a reading of 17.3, according to a survey by the Wall Street Journal.
Any reading above zero indicates improving conditions.
What happened: In the Empire survey, the subcomponents were strong. The new-orders index rose 16.9 points to 33.2 in July while shipments rose 29.6 points to 43.8. The index for number of employees rose 8 points to 20.6. Inflation pressures remained. The prices received index rose 6 points to 39.4, a new record. The prices paid index slipped slightly but also remained near its record high.
Big picture: Manufacturing has been a bright spot for the economy. Demand has been strong and the main issue for factory owners has been supply constraints and other problems in meeting that demand.
The Empire State index is the first of several regional manufacturing gauges to be released each month.
Investors also look at the data to get an early read on the national ISM factory index, which has been above the 50% break between contraction and expansion for 13 months. The July ISM data won’t come out until early next month. In June, the ISM manufacturing index slipped to 60.6% from 61.2% in May, still in elevated territory.
Market reaction: Stocks
DJIA,
SPX,
were set to open lower on Thursday on concerns about the global economy.
