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Productivity Metrics Show Cooling in U.S. Economy

Friday, March 15, 2019

Market futures are up following closes in the green in Asia overnight, as sentiment regarding a finished trade deal between the U.S. and China has remained positive. The Dow has finished up in 3 of the last 4 sessions, and Nasdaq is on pace to close higher for the 11th week in the past 12.

New economic data has hit the tape this morning, with the March Empire State Manufacturing Index — which tracks goods productivity within the state of New York on a monthly basis — coming in disappointingly low compared to expectations: a read of 3.7 is well beneath the 10.0 analysts were expecting, as well as the 8.8 reported in the previous month.

This marks the third straight month of single-digit growth in the index. While any number above zero indicates positive manufacturing generation, these figures tell a story that goods-producing in one of the most populous states in the nation has effectively gotten cooler over these winter months.

Industrial Production and Capacity Utilization numbers this morning also came in cooler than expected: +0.1% on the headline for February missed the Industrial Production estimate of +0.4%, while Utilization reached 78.2% — the lowest read since last summer. Revision were slight but mixed: for Production they improved in January to -0.4% from -0.6% initially reported, while Utilization dropped to the same 78.2%, losing 10 basis points from the initial read.

Futures do not seem bothered by these results 10 minutes before the opening bell.

Mark Vickery
Senior Editor

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