The stock market and bond market are both blind to major government economic reports right now due to the federal government shutdown. That may be changing any day, but the reality is that the markets have to rely on independent and quasi-independent economic data for market readings at the current time. Tuesday's report on the Empire Manufacturing Survey was a serious miss on expectations for the month of October.
Growth was still measured, but only down at a reading of 1.52, versus a consensus expectation of 7.00 from Bloomberg and an expectation of 5.5 from Dow Jones. The reading from September was 6.29, and for August it was 8.24. What is interesting here is that much of this slowing growth will have taken place before the federal government shutdown happened.
Another interesting aspect of the report was that new orders accelerated slightly to 7.75, after 2.35 and 0.27 in the prior two months. Those new orders should help keep the number a bit better in the next month. Decreases were seen in backlog orders, as well as slower job growth.
The New York Fed's monthly survey of manufacturers in New York State is based on multiple industries and is the same pool of roughly 175 manufacturing executives in each month.
We chalk this up as a dismal report, but we also would point out that it is just one of the regional manufacturing trend reports. The markets will forget all about this report if a deal is announced in Washington, D.C., even if this was a huge miss against the estimates.