Empire State index turns higher in June : Report

WASHINGTON (MarketWatch)
Manufacturing activity in the New York region improved a bit in June,  even as the underlying details of the report remained weak
The report fits with a picture of a struggling manufacturing sector in the second quarter after a strong start to the year
The Empire State index improved a bit to 7.8 in June from negative 1.4 in the prior month, according to the manufacturing survey released by the New York Federal Reserve
This is the highest level of the index since March
The improvement was bigger than expected
Economists surveyed by MarketWatch had expected the index to strengthen slightly to a flat Reading
“The Empire survey echoes the recent improvement in consumer sentiment where all the improvement was driven by future expectations while current conditions deteriorated,” said Julia Coronado, chief U.S. economist at BNP Paribas
The Empire State survey is a diffusion index, designed so that readings above zero indicate respondents on a net basis saw better conditions. It is not a sum of its components
The new-orders index worsened to negative 6.7 in June from negative 1.2 in May
Unfilled orders, another forward-looking component, fell to negative 14.5 from negative 6.8 in the prior month
The shipment index fell to negative 11.8 from a flat reading in May
Labor-market conditions also weakened
The index for the number of employees dropped to zero in June from 5.7 in the prior month
The average work week retreated to negative 11.3 from negative 1.1
The Empire State is the first of a host of regional manufacturing-sentiment gauges to be released
It can be volatile from month to month, but its timeliness makes it a closely followed indicator
The Institute for Supply Management reported that its key reading of the health of the manufacturing sector moved into negative territory at 49.0 in May for the first time in six months