NY Fed manufacturing index drops to lowest level since April 2009

posted at 10:01 am on September 17, 2012 by Ed Morrissey

The economy made an intrusion into the news this morning, breaking the focus of late on foreign affairs, with some bad news on the manufacturing front.  The New York Federal Reserve manufacturing index dropped to its lowest level since the recession ended, surprising economists and signaling a further slowdown in both factory orders and employment:

Factory activity in New York state contracted for a second month in a row in September, falling to its lowest level in nearly 3-1/2 years as new orders shrank further, a report from the New York Federal Reserve showed on Monday.

The New York Fed’s “Empire State” general business conditions index dropped to minus 10.41, from minus 5.85 in August, frustrating economists’ forecasts for an improvement to minus 2, according to a Reuters poll. It was the lowest level since April 2009.

The survey of manufacturing plants in the state is one of the earliest monthly guideposts to U.S. factory conditions. The sector contracted in August for the first time in 10 months.

With orders plummeting, the impact on the labor force is predictable:

Employment gauges deteriorated. The index for the number of employees fell to 4.26 from 16.47 and the average employee workweek index slipped to minus 1.06 from 3.53.

The New York Times reports that corporate earnings are expected to falter in this quarter as well:

Giants like FedEx and Intel, two bellwethers of the global economy, are warning of lower quarterly profits because of weakness in worldwide demand. Overseas companies are feeling the pinch, too. Burberry, the British luxury retailer which had seemed immune to a slowdown, is offering a similar warning.

Even smaller, family-owned companies like Eastman Machine in Buffalo, which makes cutting equipment for the textile industry, are wary. “We feel like we are walking on a tightrope,” said Robert Stevenson, Eastman Machine’s chief executive.

In all, Wall Street expects quarterly profits at the typical large American company to decline for the first time since 2009.

In part, this is due to global demand falling off.  It’s also due in no small part to a lack of dynamism at home.  The normal cycle of entrepreneurship has been disrupted by an avalanche of regulation and massive ambiguity on taxes and further regulation.  Instead of anticipating demand and investing in it, businesses won’t innovate and invest until demand already exists — a straitjacket for economic expansion.  Supporters of Obamanomics have long griped that corporate profits have skyrocketed under Barack Obama, but that’s at least partly due to their inability to price risk and put capital into play in any kind of rational manner.  The Cash for Clunkers nature of Obamanomics, with its short-term gimmickry and long-term regulatory opacity, makes that impossible.

These two indicators point to very bleak third and fourth quarters in the US.  We’re heading back into recessionary numbers, and we still have Taxmageddon ahead of us.


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Well done Ed. Thanks

That’s okay though, apparently BO wants the focus to change on how tough he’s going to be on China regarding Auto Sales.

CoffeeLover on September 17, 2012 at 10:07 AM

These two indicators point to very bleak third and fourth quarters in the US. We’re heading back into recessionary numbers, and we still have Taxmageddon ahead of us.

But hey, why worry about that when we have so many more pressing problems like the fact that some slut at a $30K/year law school was having to fork out $9/month for her own contraception.

Happy Nomad on September 17, 2012 at 10:08 AM

“This doesn’t have anything to do with President Bark’s policies, no, it’s just manufacturers responding to the anti-muslim movie.”

-Carney

Bishop on September 17, 2012 at 10:08 AM

Time to distract to President Downgrade’s fine foreign policy credentials..

Galt2009 on September 17, 2012 at 10:09 AM

So for the NY region, Obama’s policies have brought manufacturing back to the worst levels of the recession (Forward??). Couple that with the fact that we have our embassies on fire all over the ME, one dead ambassador, and three others killed I think it’s safe to conclude that Obama is an economic and foreign policy disaster.

Weight of Glory on September 17, 2012 at 10:09 AM

….oh no!…but manufacturing is on the rebound!…JugEars might be ‘mistaken’?

KOOLAID2 on September 17, 2012 at 10:09 AM

The normal cycle of entrepreneurship has been disrupted by an avalanche of regulation and massive ambiguity on taxes and further regulation.

I.e., Obamacare.

A foreign policy that gets a US ambassador killed (was any Danish ambassador killed over the cartoons?) and a domestic policy that gets US jobs killed.

Heck of a record there.

rbj on September 17, 2012 at 10:10 AM

The Magnitude of the Mess We’re In

Excellent article

CoffeeLover on September 17, 2012 at 10:11 AM

Unfortunately for the country, in the age of Barry, the bad economy does not hurt him much because many people who are unemployed will vote for him because they are afraid their straw will be taken away.

bayview on September 17, 2012 at 10:12 AM

Damn that anti-Islam movie trailer!

It affects everything, even NY manufacturing!

sentinelrules on September 17, 2012 at 10:12 AM

Is there an idiot film maker Obama can arrest for this bad news?

locomotivebreath1901 on September 17, 2012 at 10:12 AM

http://online.wsj.com/article/SB10001424052702303561504577497442109193610.html?mod=rss_opinion_main

Sorry, couldn’t get the link thing to work.

CoffeeLover on September 17, 2012 at 10:13 AM

dropped to its lowest level since the recession ended, surprising economists

Just who are these economists? Recent grads of Devry School of Economics.

HoustonRight on September 17, 2012 at 10:14 AM

This is obscene!

And you know what that means:

If Mitt brings it up before 10 or 11 PM on television or on the campaign trail with folks under 18 around, that is all the media will talk about.

If not, this will be ignored.

IlikedAUH2O on September 17, 2012 at 10:14 AM

Good analysis of our present dire situation.

I HOPE we’ll still have a little CHANGE left in our pockets by the time Obama gets done with “improving” the economy, and Bernancke gets done with debasing our currency, and the Federal bureaucrats get done with regulating the economy in to paralysis.

Scriptor on September 17, 2012 at 10:14 AM

Disaster here, disaster abroad. Feels like 1979 again. Forward in reverse. Its getting worse by the day. Keep your chin up. November is coming.

Philly on September 17, 2012 at 10:14 AM

The New York Fed’s “Empire State” general business conditions index dropped to minus 10.41, from minus 5.85 in August, frustrating economists’ forecasts for an improvement to minus 2, according to a Reuters poll. It was the lowest level since April 2009.

Ooo, that’s gonna leave a mark.

I remember when my division was part of a large semiconductor corporation during the late 80′s. The semiconductor industry is highly volatile, when it’s up, it pulls in more cash in a day than the business that our division could produce in a year. However, when it’s down, semiconductor companies lose money at alarming rates;it’s a commodity business. During one of the downturns, the company had its economists working to predict the turnaround in order to be positioned to take advantage of the upswing. After about 1 year of predictions, it was pretty obvious that one would be just as well off asking one of those magic 8 balls to predict what was going to occur in next several months as asking an economist.

AZfederalist on September 17, 2012 at 10:15 AM

More Jobs Lost As The Government Decides To Have Military Uniforms Made By Convicts

“There’s a federal program tanking our industry,” Kurt Courtney, director of government relations at the American Apparel and Footwear Association, told CNN. “The only way for workers to get jobs back is to go to prison. There’s got to be a better way.”

Maybe this is old news, but I just heard about this last night.

tru2tx on September 17, 2012 at 10:15 AM

So,Obama`s so-called,*Ìnherited*`,continues
to go down hill,er south!!

Almost four straight years of Economy/Hopey
Failure!!!

canopfor on September 17, 2012 at 10:20 AM

Below expectations, but manufacturing is in the dumps so not terribly surprising. There are a couple of more manufacturing reports coming out later this week, so we’ll get more data points. Of more interest will be the housing market readings coming Tuesday and Wednesday; we’ll be looking for more evidence that the housing market is coming back … markets taking it all in stride, taking a breather after last week’s run up …

TouchdownBuddha on September 17, 2012 at 10:21 AM

Just who are these economists? Recent grads of Devry School of Economics.

HoustonRight on September 17, 2012 at 10:14 AM

Nah, a DeVry graduate wouldn’t have been that surprised. They’ve gotta be Harvards.

Scriptor on September 17, 2012 at 10:21 AM

Come on Romney PACs, get in the Pittsburgh and Philly markets and shout the crumbling economy.

Move the needle in both PA and NJ, force Obama to react, and DRAIN OBAMA DRY.

Call them out. Obama does not have the $$$ to keep up.

matthew8787 on September 17, 2012 at 10:23 AM

How are we not up by 15 points yet? The news of late has been nothing but how much we’re swirling the bowl, when it comes to the economy, when it comes to foreign policy, when it comes to basic competance… and people are still willing to vote for this assclown masquerading as the leader of the free world?

Red Cloud on September 17, 2012 at 10:24 AM

It’s Bush’s fault a video’s fault…

right2bright on September 17, 2012 at 10:24 AM

it was pretty obvious that one would be just as well off asking one of those magic 8 balls to predict what was going to occur in next several months as asking an economist.

AZfederalist on September 17, 2012 at 10:15 AM

Just like with Texas weather. A little experience, common sense(the rareist of traits lately), and logic one can out perform the best of economists.

HoustonRight on September 17, 2012 at 10:24 AM

Just who are these economists? Recent grads of Devry School of Economics.

HoustonRight on September 17, 2012 at 10:14 AM

Hey now, be careful there! Mrs Federalist was a Devry graduate and one of the best technicians in her work group. I’m pretty sure a Devry graduate would be able to get things right more often by throwing darts at a dart board than these economists seem to be capable of doing.

AZfederalist on September 17, 2012 at 10:25 AM

You know what would help this? Trillions in new spending!

/s

trubble on September 17, 2012 at 10:26 AM

Look on the bright side! OWS protesting in 30 cities today so unemployment should drop sharply this week.

HoustonRight on September 17, 2012 at 10:27 AM

Wile B. Obama
Economic & Foreign Policy
Super Genius
Have Brain Will Travel

jukin3 on September 17, 2012 at 10:28 AM

tru2tx on September 17, 2012 at 10:15 AM

You mean that there are some Americans who aren’t being recruited by Obamasun, the clean energy industry?

Then tell them to start in pre-med at Johns Hopkins because Obamacare will improve healthcare for everyone.

IlikedAUH2O on September 17, 2012 at 10:28 AM

AZfederalist on September 17, 2012 at 10:25 AM

My sincerest apologies. No slight intended, maybe more coffee will help.

HoustonRight on September 17, 2012 at 10:29 AM

This news is small change next to the big story that noboby in the MSM has covered since September 6th. On that date, China, Russia and approximately 6 other countries announced that they will supply China with oil and ALL of the transactions are going to be conducted in the Yuan; and Russia has agreed to supply “unlimited” oil, all in Yuan.

Goodbye US dollar world reserve currency status. This action destroys the US petro dollar and will affect every family’s table in the US for a long time to come….and US citizens will never see it coming…

PatriotRider on September 17, 2012 at 10:29 AM

“…frustrating economists’ forecasts…”

Frustrating – the new Unexpected.

Drained Brain on September 17, 2012 at 10:36 AM

The frustrating part? All of this can be remedied in less than six months…but not under Obama.

right2bright on September 17, 2012 at 10:38 AM

Wile B. Obama
Economic & Foreign Policy
Super Genius
Have Brain Will Travel

jukin3 on September 17, 2012 at 10:28 AM

So does that mean we’ll be seeing a Romney ad where a former anvil worker from Obama’s time at Acme Manufacturing will be talking about how Acme killed his wife or something?

Happy Nomad on September 17, 2012 at 10:38 AM

..to 10.41, from minus 5.85 in August..

..one wonders if Robert DeNiro will be cutting another “The New NY Works For Business” business spot any time soon?

“You talking to me? You talking to me? You talking to me?”

The War Planner on September 17, 2012 at 10:40 AM

My sincerest apologies. No slight intended, maybe more coffee will help.

HoustonRight on September 17, 2012 at 10:29 AM

No problem. :-) You just provided another opportunity to dig at the so-called economic experts.

AZfederalist on September 17, 2012 at 10:42 AM

On that date, China, Russia and approximately 6 other countries announced that they will supply China with oil and ALL of the transactions are going to be conducted in the Yuan; and Russia has agreed to supply “unlimited” oil, all in Yuan.

PatriotRider on September 17, 2012 at 10:29 AM

That makes for great propaganda value right now, but given that China’s manipulation of its currency is even worse than ours, it is doomed to fail. Unless China changes that policy, those countries are going to wind up royally screwed.

/now, if Bernanke’s devaluation of the dollar continues afoot, then we will be reduced to the same status.

AZfederalist on September 17, 2012 at 10:45 AM

Irrelevant. Obama’s got swagga! Beyonce! Letterman! He’s so funny on Letterman! Wooooooo!

/

Django on September 17, 2012 at 10:45 AM

NY Fed manufacturing index drops to lowest level since April 2009

If they can’t sell it as “Bush’s Fault!”, they will attempt to sell it as “Boehner’s Fault!!!”

——————

I’ve said this before and I’ll say this again: Republicans held a majority (2+ out of 3) of the House, Senate and Presidency from January 3, 1995 to January 3, 2007. If Republican policies were the problem, then the economy should have been horrible after 12 straight years of majority-Republican control.

In reality, the economy was in very good shape when Nancy Pelosi took control of the House and Harry Reid took control of the Senate.

The last Republican-majority budget was FY 2007, and it added $501 Billion to the total national debt, increasing it from $8.507 Trillion on 09/30/2006 to $9.008 Trillion on 09/30/2007.

That is what the new Democrat majority inherited: an annual deficit of $501 Billion, and a total debt of $9 Trillion.

In just 13 days, we will reach the end of Fiscal Year 2012 on 09/30/2012. If the Democrat majorities had maintained the previous Republican-majority deficit, then we would have accumulated $2.5 Trillion in new debt over the last five years. Instead, with the Democrats’ absolutely reckless spending, we have accumulated well over $7.0 Trillion in new debt over the last five years, raising the total debt from $9 Trillion to over $16 Trillion.

How much bigger have the Democrat deficits been, compared to the last Republican-majority deficit? For the last five years in a row, the Democrats have added an average of over $1.4 Trillion per year in new debt, as compared to $0.5 Trillion in new debt under the FY 2007 Republican budget.

The democrats have nearly tripled the amount of new debt created each and every year for the last five straight years.

It’s time for a CHANGE!

ITguy on September 17, 2012 at 10:46 AM

You need investment returns, kid.

POTUS says education is a great investment.

A new fund could take all the federal employee retirement dollars and lend them to anyone who wants to study something. We can also give them cash stipends of $1,000 a week or so.

Then when they are in the new Obamaeconomy, the high salaries will pay make it easy to pay it all back or we just cut federal benefits.

After that is going well, we do the same thing with green energy with grants, no hassle loans and even paid apprentice programs from the same source.

IlikedAUH2O on September 17, 2012 at 10:48 AM

AZfederalist on September 17, 2012 at 10:45 AM

Bypassing the SWIFT system is not propaganda. It’s real, and this action effectively negates any economic sanctions placed on Iran…

PatriotRider on September 17, 2012 at 10:48 AM

Obama’s policies are right on target, heading just where he and the rest of the Destructionists want. Tear down, wreck, cause misery, the game all leftists can play.
It isn’t an accident, it is quite intentional. Four years don’t lie.

arand on September 17, 2012 at 10:48 AM

Cloward-Piven on schedule. Success!!

JimK on September 17, 2012 at 10:54 AM

AZfederalist on September 17, 2012 at 10:45 AM

I agree with your QE statement, but the last leg of the stool holding up the economy is our Reserve Currency status. Between Uncle Ben and the China/Russia and oil producers move away from the dollar we are pretty much screwed…

PatriotRider on September 17, 2012 at 10:55 AM

All of this and yet…45%+ will still vote for this guy. Idiots!

SPGuy on September 17, 2012 at 10:55 AM

Historical Debt Outstanding – Annual 1950 – 1999

Historical Debt Outstanding – Annual 2000 – 2010

Debt to the Penny
(Use to lookup debt on Fiscal Year end 2011, 09/30/2011, and at the half-way point of Fiscal Year 2012, 03/30/2012)

Let’s look at the Total National Debt since the start of the Clinton administration budgets…
09/13/2012 $16,045,678,692,730.63 (17 days left to go in FY 2012)
09/30/2011 $14,790,340,328,557.15
09/30/2010 $13,561,623,030,891.79
09/30/2009 $11,909,829,003,511.75
09/30/2008 $10,024,724,896,912.49
09/30/2007 $9,007,653,372,262.48
09/30/2006 $8,506,973,899,215.23
09/30/2005 $7,932,709,661,723.50
09/30/2004 $7,379,052,696,330.32
09/30/2003 $6,783,231,062,743.62
09/30/2002 $6,228,235,965,597.16
09/30/2001 $5,807,463,412,200.06
09/30/2000 $5,674,178,209,886.86
09/30/1999 $5,656,270,901,615.43
09/30/1998 $5,526,193,008,897.62
09/30/1997 $5,413,146,011,397.34
09/30/1996 $5,224,810,939,135.73
09/29/1995 $4,973,982,900,709.39
09/30/1994 $4,692,749,910,013.32
09/30/1993 $4,411,488,883,139.38

Now take the total debt from the end of one Fiscal Year end and subtract the total debt from the previous Fiscal Year end to find the amount of new debt created in that Fiscal Year, and give “credit”/”blame” to the party which controlled a majority (2+ out of 3) of the budget making bodies (House, Senate, and Presidency).

For Fiscal Year 2012, assume that without a budget, spending will continue at present levels, and the total FY 2012 deficit will be two times the deficit from the first half of the fiscal year.

Date, Majority Party, Increased Debt (Annual Deficit) in Billions
9/30/2012 D $1,255+
9/30/2011 D $1,229
9/30/2010 D $1,652
9/30/2009 D $1,885
9/30/2008 D $1,017
9/30/2007 R $501
9/30/2006 R $574
9/30/2005 R $554
9/30/2004 R $596
9/30/2003 R $555
9/30/2002 R $421
9/30/2001 R $133
9/30/2000 R $18
9/30/1999 R $130
9/30/1998 R $113
9/30/1997 R $188
9/30/1996 R $251
9/29/1995 D $281
9/30/1994 D $281

The largest annual increase to the national debt under a Republican majority was $596 Billion in FY 2004. Since the Democrats retook majority control, each and every year they have added over $1,000 Billion (over $1 Trillion) to the national debt.

ITguy on September 17, 2012 at 10:59 AM

Obama is an economic and foreign policy disaster.

Weight of Glory on September 17, 2012 at 10:09 AM

But he’s so gosh-darned likeable. He’s even gonna be on Letterman. Remember when Clinton was on Arsenio and played his sax? :::swoon::: /sarc

kooly on September 17, 2012 at 11:10 AM

September will be the last month for which unemployment numbers come out before the election, and this is going to make it more difficult for the BLS to get under 8%. To be a fly on the wall….

DMartin on September 17, 2012 at 11:33 AM

However, the Obamatons hope that QE3 will paper over the problem until after the election.

Difficultas_Est_Imperium on September 17, 2012 at 11:39 AM

Bleak? Can you say “Obama Recession”?

GarandFan on September 17, 2012 at 11:47 AM

I think it’s safe to conclude that Obama is an economic and foreign policy disaster.
Weight of Glory on September 17, 2012 at 10:09 AM

Accidently turned on Matt Loser this morning. Some dweeb he was interviewing actually said that Obama’s foreign policy is in tatters, but it has nothing to do with his actions.

txhsmom on September 17, 2012 at 11:54 AM

I told a GM shill from Detroit that GM had become damaged goods by the very fact that they are now tied to Obama… He already knew that btw…
http://www.marketwatch.com/story/general-motors-pushing-us-to-sell-stake-report-2012-09-17

So now we vote with everything we have, pocketbook (aka brand loyalty), internet views, donations, as well as at the ballot box…

In this tight economy they (the businesses supporting Obama) are very vulnerable, and GM is now making it known that letting Barry ‘own’ a piece of the biz is not a good deal.

As it gets tougher, and it will, remember our friends… Oh that reminds me, Tuesdays and Thursdays are Chick-fil-A day… But Monday can be too if I want it to be cause… it’s still a free country and Chick-fil-A salads Rock!

RalphyBoy on September 17, 2012 at 12:05 PM

MEANWHILE ….

http://www.marketwatch.com/story/general-motors-pushing-us-to-sell-stake-report-2012-09-17

pambi on September 17, 2012 at 11:32 AM

From the link:

GM executives are now chafing at that, saying it hurts the company’s reputation and its ability to attract top talent due to pay restrictions.

What Michael Moore always wanted: to have the Government run GM…

And now, with their socialist “at some point, you’ve made enoug money” policies controlling GM, GM is having trouble attracting top talent.

GM now wants to break free from the deal it made with the devil, but finds that it is not allowed to do so…

ITguy on September 17, 2012 at 12:06 PM

Great watch

Schadenfreude on September 17, 2012 at 1:19 PM