Economic Report: Manufacturers grow at slower but still rapid pace in September, Fed’s Empire survey shows

Economic Report: Manufacturers grow at slower but still rapid pace in September, Fed’s Empire survey shows

A worker applies a satin finish to a nickel plated bath fixture at a manufacturing company in Brooklyn, New York.

The numbers: Factories in the New York region grew at a slower but still-solid pace in September, a survey of executives showed.

The Empire State manufacturing index fell to 19 points in September from 25.6 in August, which was a 10-month high. Economists had expected a reading of 23, according to a survey by Econoday.

What happened: The index for new orders slipped 0.6 points to 16.5 and the shipments index dropped 11.4 points to 14.3.

A measure of what it costs to buy raw and partly finished goods inched up to 46.3 from 45.2, the New York Fed said. That reflects upward pressure on a variety of materials firms need to produce their goods.

Manufacturers remained optimistic about future growth, though just a little less so. The index measuring expectations six months from now dropped to 30.3 from 34.8.

The index is the first of several regional manufacturing surveys released each month. They are frequently volatile, but taken together, they present one of the timeliest reads on a critically important part of the economy and give a sense of where it’s headed.

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Big picture: The U.S. economy is booming. Growth surged in the spring and has carried through summer.

Like most other companies, manufacturers say one of their biggest problems is finding enough skilled workers to fill a high number of job openings. U.S. tariffs and foreign retaliatory measures have also made it harder to obtain a steady source of supplies at reasonable prices.

In many cases that’s put upward pressure on what it costs manufacturers to produce their goods and made it more difficult to plan.

Also Read: Americans eat out more because of the strong economy – and pay a premium

Market reaction: The Dow Jones Industrial Average DJIA, +0.03% and the S&P 500 SPX, +0.03% were set to open mildly lower in Monday trades.

The 10-year Treasury yield TMUBMUSD10Y, +0.43% settled in around 3%.

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