Among this morning's data releases was another weak NY Fed manufacturing report. The Empire State Manufacturing Survey's headline reading came in at -15.6. That compares to -14.3 for April and expectations of an improvement to -10. That miss relative to forecasts means the indicator has been weaker than expected three months in a row. The last streak of weaker-than-expected readings that lasted as long was in the first quarter of 2022.

The negative reading in the headline index indicates a contraction in the Northeast's manufacturing economy that came with weak breadth among the report's categories. Only three categories for current conditions are currently expanding: Prices Paid and Received and Inventories. Most other categories are in the bottom quintile of historical readings.

One of the weakest areas of the report has been New Orders. The January report saw this category fall to one of the weakest readings on record. While things have improved since then with little change in May, the current reading remains in the sixth percentile of all months. Perhaps more impressive is that this was the eighth month in a row with a contractionary reading in this index. As shown in the second chart below, that is one month away from tying the record of nine months in a row set in 2008/2009 and again in 2015/2016.

In addition to the ugly new orders picture, one area that is just as bad is spending plans. Overall, expectations indices are a bit more of a mixed bag, but the indices for a number of employees, capital expenditures, and tech spending are historically low with readings ranging in the 3rd to 12th percentiles. Averaging across these three indices shows that the region's manufacturers have some of the most pessimistic spending plans for labor or capital in the survey's history. The reading edged up only slightly in May and sits roughly 0.1 points above the post-pandemic low set one year ago. On the whole, that reading is in the bottom 6% of readings.

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