US NY Fed Manufacturing (Jan) -43.7 vs. Exp. -5.0 (Prev. -14.5)

Survey responses were collected between January 3rd and 10th.

Current Indicators

• New Orders -49.4 (prev. -11.3)


• Shipments -31.3 (prev. -6.4)


• Unfilled Orders -24.2 (prev. -24)


• Delivery Time -8.4 (prev. -15.6)


• Inventories -7.4 (prev. -5.2)


• Prices Paid 23.2 (prev. 16.7)


• Prices received 9.5 (prev. 11.5)


• Number of employees -6.9 (prev. -8.4)


• Average employee work week -6.1 (prev. -2.4)

Forward Looking Indicators

• General business conditions 18.8 (prev. 12.1)


• New Orders 25.2 (prev. 11.3)


• Shipments 24.6 (prev. 15.8)


• Unfilled orders 16.8 (prev. 5.2)


• Delivery Time 11.6 (prev. -1.0)


• Inventories 5.3 (prev. 9.4)


• Prices Paid 40.0 (prev. 25.0)


• Prices Received 32.6 (prev. 27.1)


• Number of employees 16.8 (prev. 10.9)


• Average employee workweek 14.7 (prev. 10.4)


• CapEx 13.7 (prev. 4.2)


• Tech spending 9.5 (prev. 8.3)

Commentary

• Economic Research Advisor at NY Fed Richard Deitz says “New York manufacturing activity fell sharply in January following a significant decline in December. While the survey’s headline index has fluctuated in recent months, this outsized drop suggests January was a difficult month for New York manufacturers, with employment and hours worked also contracting.”

via NY Fed

Reaction details (14:02)

• 
  T-Notes (H4) rallied from 112-03 to highs of 112-11 in around five minutes before beginning to pare.


• 
  2s10s cash spread rose from -19.5bps to -17.90bps in a similar timeframe.


• 
  Dollar Index fell from 103.26 to lows of 103.03 just over ten minutes later.


• 
  E-mini S&P 500 (H4) rallied from 4797.00 to peaks of 4805.00 ten minutes later.

Analysis details (14:58)

• 
  The NY Fed Manufacturing survey for January saw a huge collapse. The headline manufacturing business conditions fell to -43.7 from -14.5, much deeper than the forecast of -5. The -43.7 print takes it to the lowest reading since May 2020. The downside was led by a huge decline in New Orders and Shipments. New Orders fell to -49.4 from -11.3, while Shipments dropped to -31.3 from -6.4. It is worth noting that the NY Fed Manufacturing survey can be particularly volatile, nonetheless this is still a notable decline. The NY Fed Economic Research Adviser notes that "While the survey’s headline index has fluctuated in recent months, this outsized drop suggests January was a difficult month for New York manufacturers, with employment and hours worked also contracting.” On employment and prices, the number of employees index saw a marginal increase to -6.9 from -8.4, but still indicating a contraction. The average employee workweek slipped further into negative territory to a reading of -6.1 from -2.4. Prices Paid rose to 23.2 from 16.7, indicating a pick-up in input prices, while Prices Received eased to 9.5 from 11.5, a sign that selling price increases remained modest. Although the headline and general tone of current conditions was poor, the outlook was better, albeit still subdued. The forward-looking indicator for General Business Conditions rose to 18.8 from 12.1, while New Orders and Shipments lifted to 25.2 (prev. 11.3) and 24.6 (prev. 15.8), respectively. However, the Prices Paid saw a notable jump to 40 from 25 while Prices Received rose slightly to 32.6 from 27.1. Both the forward-looking indices for Number of employees and the Average Employee work week saw slight gains. 

16 Jan 2024 - 13:30- Fixed IncomeImportant- Source: Reuters