New York Fed: Growth Better Than Expected But Businesses Are Cautiously Optimistic

New York’s Empire State Manufacturing Index beat expectations by showing a rebound in business activity in the latest business conditions survey by the Federal Reserve Bank of New York.

On Monday, the index found that business conditions in the state are considered strong. It registered a score of 30.9, defeating the 21.6 forecast, and went far ahead of the 19.8 score that it reached in October.

What the survey found behind this positive sentiment in New York is an increase in new orders, shipments and faster delivery times that is important ahead of the holiday season. The survey also said that New York has seen record employment growth, rising nine points to 26, and the workweek index increased eight points to 23.1.

New York state’s economic revival takes on some added resonance after being the original epicenter of the COVID-19 pandemic in 2020. Unemployment soared and citizens initially poured out of New York City as cases grew higher.

However, that is not to say that the aftershocks of the global pandemic have spared New York. In the New York Fed’s survey, it found that present optimism among firms did not extend into the future.

The overall index for future business conditions six months from now fell 15 points from 52 in October to only 39.9 in November. Those surveyed expected a fall in nearly every metric, reflecting fears that unfilled orders, low inventories and slower delivery times were likely to get worse as 2022 approaches.

In recent weeks, there has been a stream of worrying data about overall inflation in the U.S. economy. The Consumer Price Index (CPI) and Producer Price Index (PPI) each showed prices for essential goods have reached highs not seen in decades in some cases . This is reflected by the lowest consumer sentiment among Americans in 10 years, fueled by anxiety over inflation.