The February report on Empire State manufacturing came in at 7.78, showing that activity in New York state continues to expand.

Expectations were for the report to come in at 8.00, down from 9.95 in January. 

The most downbeat part of the report, however, comes from the outlook of surveyed firms.

In the report, "Indexes assessing the six-month outlook, though generally positive, conveyed considerably less optimism about future business activity than in recent months. The index for future general business conditions plunged twenty-three points to 25.6, its lowest level in more than two years. The future new orders and shipments indexes also posted significant declines."

According to the latest report, "The general business conditions index edged down two points to 7.8 in February, suggesting that conditions for New York manufacturers improved modestly for a second consecutive month."

In a note to clients following the report, Ian Shepherdson at Pantheon Macro said, "In one line: Another soft industrial survey, but seasonals partly to blame."

January's report was a big bounce back after the reading unexpectedly turned negative in December. 

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