NY Fed manufacturing index drops to lowest level since April 2009

The economy made an intrusion into the news this morning, breaking the focus of late on foreign affairs, with some bad news on the manufacturing front.  The New York Federal Reserve manufacturing index dropped to its lowest level since the recession ended, surprising economists and signaling a further slowdown in both factory orders and employment:

Factory activity in New York state contracted for a second month in a row in September, falling to its lowest level in nearly 3-1/2 years as new orders shrank further, a report from the New York Federal Reserve showed on Monday.
The New York Fed’s “Empire State” general business conditions index dropped to minus 10.41, from minus 5.85 in August, frustrating economists’ forecasts for an improvement to minus 2, according to a Reuters poll. It was the lowest level since April 2009.
The survey of manufacturing plants in the state is one of the earliest monthly guideposts to U.S. factory conditions. The sector contracted in August for the first time in 10 months.

With orders plummeting, the impact on the labor force is predictable:

Employment gauges deteriorated. The index for the number of employees fell to 4.26 from 16.47 and the average employee workweek index slipped to minus 1.06 from 3.53.

The New York Times reports that corporate earnings are expected to falter in this quarter as well:
Giants like FedEx and Intel, two bellwethers of the global economy, are warning of lower quarterly profits because of weakness in worldwide demand. Overseas companies are feeling the pinch, too. Burberry, the British luxury retailer which had seemed immune to a slowdown, is offering a similar warning.

Read more: http://hotair.com/archives/2012/09/17/ny-fed-manufacturing-index-drops-to-lowest-level-since-april-2009/