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A key manufacturing index, the Empire State Manufacturing Index, which measures activity in the New York area fell to -8.6 in June from 17.8 in May, marking the largest drop in eighteen years. This was the lowest reading since October 2016 and contributes to existing concern about the future of the American economy in the midst of the ongoing U.S.-China trade war.

The measure also showed significantly diminished business expectations across categories such as net new orders, shipments, and employment. The category of employment fell to -3.5, the first negative reading in more than two years.

Peter Boockvar, chief investment officer at Blakely Advisory Group, said, “Bottom line, and I’ll be blunt, this number was terrible. It’s hard not to think this is all about tariffs and what it is doing to business confidence. We don’t even need actual tariffs, just the threat of them now on anything and anybody to address issues that have nothing to do with trade also adds a whole new layer of uncertainty.”

These continuously declining rates suggest growing apprehension about the state of the United States economy, especially due to the uncertainty surrounding the trade war between the U.S. and China.

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