Manufacturing recession likely continuing on

The NY manufacturing index fell back into contractionary territory at -4.6 vs +1.9 in October, the first October industrial figure to be seen. New orders went back below zero and backlogs weakened further to -19.1 from -5.2. Inventories were negative for a 6^th straight month. Employment and the workweek were the positives as they rose above zero for the first time since July. Prices paid were little changed m/o/m while those received fell by a similar amount that it rose in September. Delivery times fell negative again.

The 6 month business activity outlook fell by 3.2 pts after rising by 6.4 pts last month. At 23.1 it compares to the 6 month average of 18.7 and part of the optimism has to do with a hoped for rise in inventories after the recent destocking. The 6 month outlook for inventories rose to 5.3 from zero. On the other hand, backlog expectations went negative again and new orders expectations dropped to 19.4 from 34.8. Capital spending expectations fell a touch. Future plans for hiring and the workweek rose m/o/m.