US empire state manufacturing index remains weak in September

The Empire State manufacturing index was nearly unchanged at -14.7 in September, as the indicator of New York state manufacturing sentiment failed to bounce back from the sharply negative August reading (-14.9). New orders (-12.9, previous: -15.7) and shipments (-8.0, previous: -13.8) both moved up modestly from their prior month readings, but continue to point to slowing output and demand for manufacturing through the end of Q3.

Additionally, the employment index (-6.2, previous: 1.8) slid to a three-year low and the average workweek contracted sharply (-10.3, previous: -1.8). Together, these data suggest regional manufacturing slowed sharply at the end of the quarter and is likely to face further headwinds in the months ahead from a strong dollar and lower energy prices.

"However, given the relatively small size of the manufacturing base in New York state, we place limited weight on this morning's release. We look to Thursday's release of the Philadelphia Fed manufacturing index, often a better indicator of national trends, for further indication of the state of the US manufacturing sector at the end of Q3",says Barclays.