New York Fed’s Empire State factory gauge slumps in October

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The numbers: The New York Fed’s Empire State business-conditions index, a gauge of manufacturing activity in the state, edged down 6.5 points in October to negative 4.6, the regional Fed bank said Monday. 

Economists had expected a negative 6 reading, according to a survey by the Wall Street Journal.

Any reading below zero indicates deteriorating conditions.

Key details: The index for new orders fell 9.3 points to negative 4.2 in October.

The shipments index fell points to 1.4 in the month.

Unfilled orders plunged 19.1 points to negative 13.9.

Employment ticked higher in October while prices declined modestly.

Looking ahead, firms remained relatively optimistic about the six-month outlook, the regional Fed bank said.

Big picture: The drop in October comes after a solid increase in September. The index has been unusually volatile for most of the past two years with some deeply negative readings followed by improvement.

Some economists saw signs that manufacturing is bottoming but others are more skeptical of a turnaround.

Last month, the nationwide ISM factory index improved to 49% in September. While still negative, it was the highest reading in almost a year.

Market reaction: Stocks
DJIA

SPX
were set to open modestly higher on Monday, while the 10-year Treasury note yield
BX:TMUBMUSD10Y
rose to 4.70% in early trading.

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