Manufacturing in the New York region expanded in June at the slowest pace in seven months as orders and sales cooled.
The Federal Reserve Bank of New York’s general economic index dropped to 2.3 this month, less than the lowest forecast of economists surveyed by Bloomberg News and down from 17.1 in May. Readings greater than zero signal expansion in the so-called Empire State Index, which covers New York, northern New Jersey and southern Connecticut. The last negative reading was in October.
A pullback by American consumers over the past two months combined with a global slowdown means U.S. factories, one of the bright spots of the recovery, may continue to receive fewer orders and reduce production. Fed policy makers meet next week to determine if the world’s largest economy needs further stimulus to boost growth and reduce unemployment.
“The economy’s not building any momentum and instead we’re sort of confined to a pretty mild pace of underlying growth,” Sean Incremona, senior economist at 4Cast Inc. in New York, said before the report, who projected the index would drop to 5.
Stock-index futures were little changed. The contract on the Standard & Poor’s 500 Index maturing in September rose 0.1 percent to 1,327.6 at 9:16 a.m. in New York.
The median estimate in a survey of Bloomberg economists called for a decrease to 12.5. Estimates ranged from 5 to 16.1.
The Empire State gauge of new orders fell to 2.2 in June from 8.3 the prior month, while the shipments measure declined to 4.8 from 24.1.
The index of factory employment decreased to 12.4 in June from 20.5.
The index of prices paid fell to 19.6 from 37.4 in May.
Factory executives in the New York Fed’s district were also less optimistic about the future. A measure of the outlook six months from now fell in June to 23.1, the lowest since October, from 29.3 the month earlier.
Manufacturing makes up 12 percent of the U.S. economy and about 6 percent of New York’s.
Truckload carrier Landstar System Inc. of Jacksonville, Florida is among companies counting on modest expansion in the coming months.
“The growth that we’ve seen -- albeit slow growth -- we continue to think that will be for the balance of the year,” Pat O’Malley, Landstar’s vice president and chief commercial and marketing officer, said at a June 13 conference.
A report yesterday showed retail sales fell in May for a second month as slower employment and subdued wage gains damped demand. The 0.2 percent decrease followed a similar decline in April that was previously reported as a gain, Commerce Department figures showed.
Another report today showed industrial production cooled in May as fewer motor vehicles rolled off assembly lines as sales slowed. Output at factories, mines and utilities decreased 0.1 percent after April’s 1 percent advance that was the biggest since December 2010. Manufacturing production dropped 0.4 percent last month.