The Empire State headline drop to a five-month low of -6.8 from -2.0 in September and -4.2 in August still allowed a slight rise in the Institute for Supply Management ISM-adjusted Empire State after an outsize September hit. That gauge rose to 46.3 from an eight-month low of 45.1 in September but a higher 50.2 in August. There were expansion-lows last January of -19.4 for the headline and 43.4 for the ISM-adjusted measure.
Analysts with Action Economics still expect a modest recovery in producer sentiment through Q4 from recent sentiment weakness “as the massive six-quarter inventory downswing attributable to petro-sector supply glut, a strong dollar, and a sluggish world economy is likely coming to a close.” AE expects an October Philly Fed drop to 6.0 from a 19-month high of 12.8 in September, versus a 3-year low of -10.2 last December, alongside an ISM-adjusted bounce to 48.0 from 44.8 in September, versus a 44.1 expansion-low in April. They expect the ISM-adjusted average of the major surveys to remain at the 50 level of August and September, and previously in May and June, versus a 49 expansion-low in January and February, and previously in October of 2012. There was a 12-month high of 52 in July and March.