Empire State survey of New York economy turns negative for first time in about 18 months as omicron strikes

The numbers: The Empire State survey of business conditions nosedived to -0.7 points in January from 31.9 in the prior month, the New York Federal Reserve said, reflecting fresh strains from the omicron virus and ongoing supply-chain bottlenecks.

It was the first decline in the index since June 2020. Economists had expected a reading of 25.5, according to a survey by The Wall Street Journal. 

Any reading below zero indicates worsening conditions. The index has been quite strong through most of 2021, even during the delta wave of the coronavirus, before the recent tumble.

Key details: An index of new orders sank 32 points to -5.0 to drive much of the decline in the Empire State survey. Employment also softened.

Businesses saw little relief from high inflation. The prices paid and prices received indexes tapered off slightly, but remained quite high and companies don’t expect much relief in the next six months.

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