New York Fed Empire State manufacturing index for April comes in at 24.6 versus 0.5 est

The New York Fed Empire State manufacturing index came in at 24.6 versus -11.8 in March. The estimate was for a rise to 0.50. Much better-than-expected report as new orders, prices paid (a new record), shipments lead the way higher.

• New orders 25.1 versus -11.2 in last month
• prices paid +86.4 a new record versus 73.8 last month
• prices received 49.1 versus 56.1 last month
• employment index +7.3 versus +14.5 last month
• average employee workweek 10.0 verse 3.5 last month
• shipments 34.5 versus -7.4 last month
• unfilled orders 17.3 versus 13.1 last month
• delivery time 21.8 versus 32.7 last month
• inventories 13.6 versus 21.5 last month

Six month forward-looking guidance shows came in weaker than the March number but is still positive with inflation expectations six-month forward still elevated.

• six month business conditions index +15.2 versus +36.6 in March
• new orders 15.0 versus 41.1 last month
• shipments 13.4 versus 42.3 last month
• unfilled orders -5.5 versus 50.9 last month
• delivery time a .2 versus 18.7 last month
• inventories -4.5 versus 13.1 last month
• prices paid 72.7 versus 72.9 last month
• prices received 55.5 versus 58.9 last month
• number of employees 25.8 versus 27.0 last month
• average employee workweek 5.5 versus 50.0 last month
• capital expenditures 31.8 verse 35.5 last month
• technology spending 27.3 versus 23.4 last month

Of note in the forward guidance is a vast majority of the respondents still expect prices paid in prices received to be higher six-month forward. Concerns about inflation remaining embedded with inflation expectations rising makes these numbers a concern.

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From the NY Fed:

Business activity picked up markedly in New York State, according to firms responding to the April 2022Empire State Manufacturing Survey. The headline general business conditions index surged thirty-six points to 24.6. New orders and shipments grew strongly, and unfilled orders increased. Delivery times lengthened, though at a slower pace than in recent months, and inventories rose. Labor market indicators pointed to a small increase in employment and the average workweek. The prices paid index hit a record high, and the prices received index remained elevated. Plans for capital and technology spending were solid. Looking ahead, firms were significantly less optimistic about the six-month outlook than in recent month.

/ inflation 
Inflation

Inflation is defined as a quantitative measure of the rate in which the average price level of goods and services in an economy or country increases over a period of time. It is the rise in the general level of prices where a given currency effectively buys less than it did in prior periods.In terms of assessing the strength or currencies, and by extension foreign exchange, inflation or measures of it are extremely influential. Inflation stems from the overall creation of money. This money is measured by the level of the total money supply of a specific currency, for example the US dollar, which is constantly increasing. However, an increase in the money supply does not necessarily mean that there is inflation. What leads to inflation is a faster increase in the money supply in relation to the wealth produced (measured with GDP). As such, this generates pressure of demand on a supply that does not increase at the same rate. The consumer price index then increases, generating inflation.How Does Inflation Affect Forex?The level of inflation has a direct impact on the exchange rate between two currencies on several levels.This includes purchasing power parity, which attempts to compare different purchasing powers of each country according to the general price level. In doing so, this makes it possible to determine the country with the most expensive cost of living.The currency with the higher inflation rate consequently loses value and depreciates, while the currency with the lower inflation rate appreciates on the forex market.Interest rates are also impacted. Inflation rates that are too high push interest rates up, which has the effect of depreciating the currency on foreign exchange. Conversely, inflation that is too low (or deflation) pushes interest rates down, which has the effect of appreciating the currency on the forex market.

Inflation is defined as a quantitative measure of the rate in which the average price level of goods and services in an economy or country increases over a period of time. It is the rise in the general level of prices where a given currency effectively buys less than it did in prior periods.In terms of assessing the strength or currencies, and by extension foreign exchange, inflation or measures of it are extremely influential. Inflation stems from the overall creation of money. This money is measured by the level of the total money supply of a specific currency, for example the US dollar, which is constantly increasing. However, an increase in the money supply does not necessarily mean that there is inflation. What leads to inflation is a faster increase in the money supply in relation to the wealth produced (measured with GDP). As such, this generates pressure of demand on a supply that does not increase at the same rate. The consumer price index then increases, generating inflation.How Does Inflation Affect Forex?The level of inflation has a direct impact on the exchange rate between two currencies on several levels.This includes purchasing power parity, which attempts to compare different purchasing powers of each country according to the general price level. In doing so, this makes it possible to determine the country with the most expensive cost of living.The currency with the higher inflation rate consequently loses value and depreciates, while the currency with the lower inflation rate appreciates on the forex market.Interest rates are also impacted. Inflation rates that are too high push interest rates up, which has the effect of depreciating the currency on foreign exchange. Conversely, inflation that is too low (or deflation) pushes interest rates down, which has the effect of appreciating the currency on the forex market.
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