New York Fed Manufacturing Surges To Highest In Three Years But Profit Margins Crushed

Tyler Durden's picture

The August Empire State Manufacturing Index printed at a blistering 25.2, reversing last month's plunge to 9.8, smashing expectations of a 10.0 print, and the highest print since September 2014.

The surge was driven by the new orders index which rose seven points to 20.6 and the shipments index, which hit 12.4. Meanwhile, delivery times continued to lengthen suggesting growing capacity problems in the supply chain, while inventory levels declined. More good news came from labor market indicators, which pointed to an increase in employment and hours worked.

However, the biggest red flag was for corporate margins, as prices paid spiked 9.7, from 21.3 to 31.0 while prices received declined -4.8, from 11.0 to 6.2, keeping a lid on profits. The spread between the Prices Received and Prices Paid, a proxy for corporate profits, declined to the lowest in 5 years.

That above, however, did not dent firms' optimism, and after the Empire State "Hope" Index plunged last month to an 8 month low, it rebounded in August, with indexes assessing the six-month outlook suggested that firms were quite optimistic about future conditions. The index for future business conditions rose ten points to 45.2, and the index for future new orders moved up eight points to 41.3. Employment was  expected to increase modestly, though the average workweek was expected to decline slightly.

Finally, not even the traditionally optimistic outlook had anything good to say about an increase in corporate spending: the future capex index slipped to 11.6, the lowest in almost one year.

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NotApplicable's picture

Aka, "Eating the seed corn."

spanish inquisition's picture

Don't worry, gonna make it up on volume.

BandGap's picture

Waiting till the end of the year/early next year for a new vehicle.

One mans's ceiling is another man's floor.

Stormtrooper's picture

OK ZeroHedgers.  That means there must now be good jobs galore out there.  Get off your electronic devices and go out and land one of your very own.

LawsofPhysics's picture

Garbage in, garbage out...

How much longer will the masses believe all these bullshit eCONomic models?

LMFAO!  At this point, fuck em. Evolve or die motherfuckers...

Hume's picture

As long as the masses keep getting jobs. Not sure the "masses" look at the empire survey.

BandGap's picture

People will grasp onto anything in an effort to avoid pain. These are the experts, no?

I have lterally witness people dying of lung cancer smoke right through two surgeries, chemo and into their death bed.

Quivering Lip's picture

If its all fake isn't it All fake! 

Vinividivinci's picture

Bullish...I mean bearish...aww, I'm confused again !
Is good news bad news, or is bad news good news?
Or is good news, good news?

NEOSERF's picture

So sell anything you can and profit be damned basically

KansasCrude's picture

The only way I believe this is if its the FED's Electronic Money Printing and Currency Printing facilities......AKA BULLSHIT factories and they are 100% of the sample.

asteroids's picture

Remember kids, "reversion to the mean" is coming.