Washington, DC, May 16--Manufacturing activity in the New York area deteriorated sharply for the second straight month in May, the New York Federal Reserve Bank said Monday.
The bank's Empire State Manufacturing index fell to -11.1 in May from a revised 2.0 in April. This was the first negative, and lowest, reading since April 2003. Readings below zero indicate contraction.
The drop was unexpected. Economists were forecasting the index to rebound to about 10.7 in May from the initial estimate in April of 3.1.
The new orders index dropped to -7.1 from 1.2 in April. Unfilled orders fell to -17.3 from -8.2.
The employment index fell to 0.2 in May from 8.5 in April. This is the lowest reading since September 2003. The workweek index inched higher to -2.5 from -4.4.
The only index that increased was shipments, which rose to 0.8 from -1.0.
Economists were divided over the significance of the sharp drop in the index.
