While most of today's economic data has been weaker than expected, the Empire Manufacturing report for November came in slightly ahead of expectations (-5.2 vs -8.0). The table to the right highlights the levels of the General Business Index and each subcomponent based on the current environment as well as the outlook six months out. Given that this morning's headline reading was negative, it is not a surprise that five of the nine subcomponents are also negative. Additonally, it is also typical to see that the outlook for six months from now is higher than the current environment.
One component that does stick out, however, is employment. Not only is it the most negative component this month, but it is also only one of two components that is negative based on expectations six months from now. In other words, manufacturers are not and have no plans on hiring.
The top chart below shows the historical levels of the Empire Manufacturing Index for both current conditions and conditions six months out. While the two series tend to move in the same direction over time, this month saw each index move in opposite directions.
The second chart shows the historical levels of plans for capital expenditures and technology spending over the next six months. Here again, manufacturers in the New York region are reigning in their investment plans.