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August 16, 2004

Indicator of New York State manufacturing employment fell 'markedly'

A closely watched index of employment expectations among New York manufacturers “dropped markedly,” the Federal Reserve Bank of New York’s Buffalo Branch reported in its latest monthly analysis.

The analysis found that the index for the average employee work week, which The Wall Street Journal calls a “telltale” for future hiring, dropped from 22.5 to 6.77. The index that reflects expectations for future hires also dropped from 36.34 to 9.68. Both indicators continue to reflect more employers with optimistic outlooks than negative expectations. In addition, more employers reported adding jobs than said they were reducing employment.

According to the U.S. Bureau of Labor Statistics, manufacturing employment in New York was 602,000 in June, down 17,000 from a year earlier.

“Although the general business conditions index was positive in August, it dropped nearly 25 points to 12.6,” the Federal Reserve said. “Similarly, indexes for new orders and shipments fell but remained positive, while the unfilled orders index dropped below zero for the first time in roughly a year.”

The lower numbers indicate that fewer factories are growing or expanding.

The analysis also found that the number of manufacturers experiencing a higher number of orders dropped from 46 percent to 34 percent over the same period.

"While 46% of respondents had reported improved conditions in July, only 28%- the lowest level in more than a year- did so in August," the report said. "Sixteen percent reported that conditions had worsened, compared with 10% last month."