The numbers: The Empire State Manufacturing Index slipped to a reading of 24.3 in May from 26.3 in April, which was the highest in three-plus years, the New York Fed said Monday. Economists surveyed by The Wall Street Journal expected a reading of 24.8.
What happened: The new orders index rose 2 points to 28.9 in May, while shipments rose 4.7 points to 29.7.
Both price indices hit records in May. The prices paid index rose 8.8 points to 83.5, while prices received rose 2.2 points to 37.1. Expectations for business in the next six months slipped 3.2 points to 36.6.
Big picture: The Empire State report gets market attention because it is seen as a leading indicator of national trends. The measure has steadily increased from a reading of 3.5 in January.
In April, the Institute of Supply Management’s manufacturing index, considered to be the best gauge of factory activity across the country, slipped to 60.7 from a reading of 64.7. Economists think a growing U.S. economy will keep factories humming but perhaps not at the levels seen in April.
What economists are saying: “Healthy goods demand, rising business investment, reviving global activity and fiscal stimulus will keep U.S. manufacturing advancing at a solid clip though the rest of 2021,” said Oren Klachkin, economist at Oxford Economics.
Market reaction: Stocks
headed lower on Monday following the worst week for major equity benchmarks in nearly three months on the back of rising inflation fears.