New York State Manufacturing Sentiment Plummets In May: Trouble Ahead For The ISM Manufacturing PMI?

The New York Empire State Manufacturing Index, which measures the sentiment of manufacturing executives about business conditions in the state of New York, unexpectedly plunged to negative 31.8 points in May, down from 10.8 in April and considerably below the 3.75 decline expected. 

Key Takeaways From May's NY Empire State Manufacturing Index: 

• The general business conditions index experienced a staggering 43-point drop to -31.8 in May, the lowest recorded level in four months.
• New orders and shipments sank sharply after rising in April, with negative figures of 28 and 16.4, respectively. 
• The delivery times index decreased to negative 5.7, indicating that delivery times have cut somewhat. 
• Inventories fell to negative 12.3, while employment and hours worked fell for the fourth month in a row to negative 3.3 and negative 3.5, respectively. 
• The rate of price rises remained stable, with the prices paid index little changed at 34.9 and the prices received index steady at 23.6. 
• A forward-looking indicator on future business conditions edged slightly up from 6.6 to 9.8, indicating that businesses do not foresee significant improvement in activity over the next six months. 

Relationship Between NY Empire State Manufacturing and ISM Manufacturing PMI

Although not directly comparable because they are calculated using different surveys, methodologies and geographic regions, both the NY Empire State Manufacturing Index and the ISM Manufacturing PMI index can provide valuable insights into the health of the manufacturing sector and the broader economy. 

The national manufacturing sector activity as measured by the ISM index was 47.1 in April and marked the sixth straight month of contraction. The next upcoming release for the ISM Manufacturing PMI is scheduled for June 1, 2023.  

The U.S. Dollar Index, which is tracked by the Invesco DB USD Index Bullish Fund ETF UUP, weakened 0.3% in Monday morning trade.

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