The Empire State Manufacturing Index advanced nearly 4 points in the month to 10.16 from 6.17 back in October. As always, the new orders segment is the highlight of the report coming in at 9.14 after dipping into the negative column last month at -1.73. The shipments component showed a similar gain, to 11.83 from October's very flat 1.12. Employment growth is steady, at 8.51 compared to 10.23 last month, while the 6-month general conditions outlook rose nearly 6 points 47.61. For employment, the 6-month outlook is very positive, nearly doubling this month to 24.47. Other readings showed no change in inventories and no change for prices of finished goods. However, prices for raw materials, despite the big decline in gas, continue to rise, but only moderately, at 10.64 compared to 11.36 in the previous month. All in all, the month of November is setting up to be quite positive, as the Empire State Manufacturing Report offers the first look at this month's manufacturing activity and may lift expectations for respectable strength going into the end of the year… which is normally quiet for the manufacturing sector anyway. Other Fed districts will release their manufacturing data later this week and next.

 

 

On a national level, overall industrial production for the month of October declined on pullbacks in mining and utilities. So for October, industrial production dipped by 0.1% after jumping by 0.8% back in September, and was well short of economists’ projected gain of 0.2%. Manufacturing improved by 0.2% in October after a 0.2% rebound in September, but was still short of analyst expectations for a 0.3% increase. Mining declined by 0.9% in October, following a 1.6% boost the month before, while utilities slipped 0.7% after a monthly 4.2% surge in September. We note that the production of nondurable goods increased by 0.3% in October and durable goods increased 0.1%. In the durable goods space, machinery increased by the largest amount (+1.3%), while wood products, computers and electronic products, and furniture and related products all recorded gains of over 0.5%. However, these gains were partially offset by declined in the indexes for nonmetallic mineral products and motor vehicles and parts – all down more than 1.0%. The decline in the motor vehicles and parts segment was due to a decline in vehicle assemblies, which fell by 400,000 units to an annual rate of 11.1 million. For nondurable goods there was an overall increase in production, with the largest being noted in chemicals, plastics, and rubber products. Only paper-related products posted a decline in the month. In October, overall capacity utilization came in at 78.9% versus 79.2% in September. Despite the dip month-over-month, the details in the industrial report point to overall positive signs as manufacturing still remains in a moderate uptrend.