August NY Fed survey

The August NY Fed survey, the first August industrial number out, was a much better than expected 12.1 vs the consensus of 3 and up from -.6 in July. It’s the first positive reading since April and the highest since Nov ’07. The number however does not measure the degree of the improvement, just the direction. New Orders rose 8 points and was positive for a 2nd straight month. Backlogs remained negative but the least so since Sept ’08. Shipments rose for a 2nd month and to the highest since April ’08. The Employment component rose to -7.5 from -20.8, the most since Oct ’08. Inventories rose 14 points but still remained firmly negative at -22.3. Prices Paid rose more than 3 points but Prices Received fell by 5 points which combined means a squeeze in margins if continued. The 6 month outlook rose to 48.2 from 34, the highest since July ’07. Net-net, the data is evidence that manufacturing will help lead the way to positive GDP in Q3.

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