Despite a headline beat on the back of ‘hope’ rising, Empire Fed data shows two disturbing trends – slowing new order growth and collapsing margins as price pressure bites.
Empire Fed New Orders were unable to reach the peak of 2017 and have now faded lower for two straight months…
Additionally, Bloomberg notes that the spread between the New York Fed prices paid index minus the prices received index widened in August for the first time in three months, a sign firms remain under considerable profitability pressure, according to today’s Empire State Survey.
Profitability typically suffers when companies experience a lag between prices paid for inputs and prices received for finished products. The data also show businesses are expecting future prices paid to remain elevated.
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Author: Tyler Durden