By Greg Robb, MarketWatch
Bloomberg News/Landov Enlarge Image
The numbers: The New York Fed’s Empire State manufacturing survey’s main index rebounded 12.9 points to 4.3 in July, the New York Fed said Monday. Economists had expected a reading of 0.5, according to Econoday.
The gain partially reverses a steep fall in June, when the index plunged by a record 26.4 points to minus 8.6, the lowest level of the index since October 2016.
Any reading above zero indicates improving conditions.
What happened: The subindexes were mixed. The new-orders index rose in July but remained negative at 1.5. The shipments index moved lower to 7.2. Unfilled orders declined for the second straight month and inventories fell. The index for number of employees slid to minus 9.6, its lowest level in almost three years.
The report’s six-month outlook index rose to 30.8 from 25.7.
Big picture: There will be some relief that the index didn’t deteriorate further in July. Manufacturing has been a weak spot in the domestic economy. The Institute for Supply Management said its index for national factory activity fell to 51.7 in June, the slowest pace since October 2016. Last week, Fed Chairman Jerome Powell cited the weak ISM data as one reason many central bank officials support an interest-rate cut, perhaps as soon as the end of the month.
What are they saying? “A welcome partial rebound, but a real recovery is unlikely before the fall,” said Ian Shepherdson, chief economist at Pantheon Macroeconomics.
Market reaction: Stocks wobbled at the open with the Dow Jones Industrial Average /zigman2/quotes/210598065/realtime DJIA +1.07% down slightly. The main U.S. equity benchmarks finished at all-time highs last week on hopes of central-bank stimulus.