After surging in June, the Empire State Manufacturing Index remained positive for a second straight month, data from the Federal Reserve Bank of New York showed Monday.
The index of general business conditions dipped six points from 6.6 in June to 1.1 in July, a level indicating that activity in the manufacturing sector held steady. In the prior month, the index surged more than 38 points to cross back into positive territory. The index had spent five of the prior six months in negative territory, indicating contracting activity.
Although the index declined, it came in better than expected. Economists had forecast the index would fall back into negative territory, according to Econoday’s survey.
The survey was the latest piece of data supporting the idea that the economy could experience a “soft landing.” That is, inflation could come down without a significant economic slump or rise in unemployment.
New orders inched higher and shipments increased, indicating rising demand. Delivery times shortened, a sign that supply chains are in good shape. The gauge of payroll levels moved higher, although the average workweek was unchanged.
Inventories declined steadily, a negative for growth.
Businesses were split on how economic conditions developed in the month. Twenty-nine percent said conditions improved and 27 percent said they worsened.
On the outlook for the future, optimism remains subdued although businesses do expect some improvement. Capital spending plans remain soft, the New York Fed said.
Inflationary pressures continued to moderate, with declines in both the prices paid and the prices received barometers. The prices paid index has now fallen almost fifty points over the past year, and the prices received index has fallen a cumulative twenty-seven points, the New York Fed said.