(Kitco News) – Manufacturing activity in the New York region collapsed this month, according to the latest figures published by the New York Federal Reserve.
The regional central bank said on Friday that its Empire State manufacturing survey slid to -20.9 in March, far below February’s reading of -2.4. The data was much worse than expectations, as consensus forecasts called for a shallower decline to -7.
“Manufacturing activity fell significantly in New York State in March, with a decline in new orders pointing to softening demand,” said Richard Deitz, Economic Research Advisor at the New York Fed. “Labor market conditions remained weak as both employment and hours worked decreased.”
Gold prices fell following the downbeat economic data. Spot gold slid to a new session low of $2,158.14 in the minutes after the 8:30 am release, last trading at $2,.50 an ounce, down 0.15% on the day.
The components of the report showed broad-based weakness in the region’s manufacturing sector. The New Orders Index dropped to -17.2, down from February’s reading of -6.3, while the Shipments Index dropped into negative territory at -6.9, down from 2.8 last month.
The employment picture in the region also worsened. “The index for number of employees fell seven points to -7.1, and the average workweek index fell six points to -10.4, pointing to a modest decline in employment levels and hours worked,” the report said.
The report did show a pullback in inflation pressures, with the Prices Paid Index falling to 28.7, down 4.3 points from the previous month’s reading of 33. The moderating inflation numbers are seen as a potential positive for gold as it could encourage the Federal Reserve to rein in its aggressive monetary policies sooner than expected.
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