Manufacturing in the densely populated northeast region of the U.S. that includes New York, northern New Jersey and southern Connecticut is at its lowest level since April of 2009, according to a new Bloomberg business report.
The Federal Reserve Bank of New York’s general economic index dropped to minus 10.41 from minus 5.85 in the August report. The averaged predictions of 53 economists in a speculative Bloomberg survey called for minus 2, less than half the actual drop off in manufacturing. Any reading below zero shows contraction in the important manufacturing region measured by Empire State Index.
The worrisome economic data shows factory assembly lines slowing in amid soft exports, relatively small business investments and a decline in household spending. The U.S., for the first time in decades, has experienced unemployment over 8 percent for more than three years. That and slowing economy in 2012 are causing many unemployed to give up their job searches.
“The momentum has turned negative in manufacturing,” Guy Berger, a U.S. economist at RBS Securities Inc. in Stamford, Connecticut, said before the report. “There’s no imminent pickup in the near term.”
Bloomberg survey estimates ranged from minus 10 to 5, which, though broad as manufacturing estimates go, was accurate.
The measurement does not report changes in orders and employment and many economists consider it a measure of factory managers’ sentiment.
In addition, The Empire State gauge showed a decrease in new orders to minus 14 this month, which represents the lowest reading since November 2010, and is down from minus 5.5 from August. Meanwhile, shipments dropped to 2.8 from 4.1 in the latest report.