The March/April dead cat bounce in Empire Fed Survey is back deep into contraction territory. Having surged to +9.6, May saw respondents entirely lose faith and crash back to -9, massively missing expectations of a +6.5 print (the biggest drop since Oct 2014). Under the surface everything plunged (except the number of employees which inched higher) as New Orders, Workweek, and Prices received all contracted drastically. Even hope tumbled with future CapEx expectationscollapsing by the most since June 2013.
The bounce is dead...
Business activity contracted for New York manufacturing firms, according to the May 2016 survey. Following a brief foray into positive territory in March and April, the general business conditions index fell back below zero, declining nineteen points to -9.0. Nineteen percent of respondents reported that conditions had improved over the month, while 28 percent reported that conditions had worsened. The new orders index also turned negative, its seventeen point drop to -5.5 signaling a decrease in orders. The shipments index, down twelve points to -1.9, showed that shipments were flat, and the unfilled orders index fell to -6.3. The delivery time index, at -6.3, pointed to shorter delivery times, and the inventories index, at -7.3, suggested that inventory levels were lower.
The new orders and shipments indexes also fell below zero, pointing to a decline in both orders and shipments. Survey results indicated that inventory levels were lower and delivery times shorter. The prices paid index edged down to 16.7—a sign that moderate input price increases were continuing—and the prices received index fell below zero, suggesting a small drop in selling prices. Employment levels appeared to be little changed, while the average workweek index pointed to a decline in hours worked. The six-month outlook was somewhat less optimistic than in April, and the capital spending index plummeted to 3.1, its lowest reading in more than two years...
This collapse is probably transitory though as yet another Fed speaker proclaimed the US economy doing "rather well" and expedcts 2 to 3 rate cuts this year...