Manufacturing in New York Still Slumping

New York, NY, June 15, 2009--The slumping New York state manufacturing sector shrank at a more severe rate in June than during the previous month, the New York Federal Reserve said.

The New York Fed's Empire State general business conditions index fell to minus 9.41 in June from minus 4.55 in May.

Economists polled by Reuters had expected a June reading of minus 4.5, and the surprisingly weak result challenges analysts who believe the U.S. economy is poised for a rebound.

The survey of manufacturing plants in the state is one of the earliest monthly guideposts to U.S. factory conditions.

The fall in the main index came as shipments dropped into negative territory, coming in at minus 4.84 in June from positive 1.29 in May.

New orders remained negative at minus 8.15 but not quite as bad as May's 9.01.

Inventories fell, hitting 25.29 versus May's 21.59, continuing a liquidation of stockpiles that many economists say is necessary before the economy can recover.

Inflationary pressures also remained negative but much less so than in May, with the prices paid gauge coming in at minus 5.75 compared with May's minus 11.36.