Empire State Survey Suggests Recession is Ending

NEW YORK FED -- The Empire State Manufacturing Survey indicates that the general business conditions index fell several points from last month’s level, dropping to -9.4, but remained well above the string of deeply negative readings observed in the October-March period (see chart above). This month, 28% of respondents reported that conditions had improved, compared with 23% last month, while 38% of respondents reported that conditions had worsened, up from 28%.

Future indexes continued to rise, conveying an expectation that conditions should get better over the next six months. The future general business conditions index advanced 4 points, to 47.8, its highest level in nearly two years (see chart above); 61% of respondents expected conditions to improve over the next six months. The future new orders index, at 45.8, suggested similar optimism, as did the future shipments index at 48.7. The capital expenditures index rose into positive territory for the first time since October, climbing 13 points to 11.5, and the technology spending index also rose above zero, to 1.2.

MP: The Empire Fed future conditions index of 47.8 in June is the highest reading since July 2007, and the 54 point rebound over the last four months (March-June) matches the 54 point increase over the four month period from October 2001 to January 2002 that signalled the end of the 2001 recession.