The Empire State
The Empire State rise to 4.0 in October from 2.0 in September left the measure back near the 4.8 figure in August, leaving the index about half way between the 3-year low of -8.6 in June and the 6-month high of 17.8 in May. The components were mixed, and the ISM-adjusted Empire State slipped modestly to 52.1 from 52.4 in September, leaving it closer to the 4-month high of 54.0 in April than the 3-year low of 48.5 in June. Sentiment is facing an October headwind from the UAW-GM strike of 49k workers starting on September 16, alongside ongoing erratic impacts from competing perspectives on the trade war, troubles abroad, and stock price gyrations. Analysts still expect a factory sector lift into Q4 beyond the hit from the auto strike, though the risk is that the U.S. factory sector is pulled-down by a prolonged strike, delays at Boeing, and weakness abroad. Elevated inventories with the aftermath of tariff front-running fed the factory sector pull-back over the first four months of 2019, and this impact should be dissipating. Analysts expect the October ISM-adjusted average of the major sentiment surveys to remain at the recent-low of 52 seen in September, and also July, versus 53 in August. The index sat at 53 in June and 54 over the prior six months, following a winter pullback from 59 cycle-highs in four of the five months through September.