The Federal Reserve today confirms the economic underpinnings of a gloomy NYT/CBS poll yesterday that found high levels of economic anxiety among New Yorkers; expectations weren't high for the manufacturing sector to begin with, but they've been underperformed.

Manufacturing in the New York region shrank more than forecast in June as customers reduced orders because of the slowdown in consumer spending and business investment.

The Federal Reserve Bank of New York's general economic index dropped to minus 8.7 from minus 3.2 a month earlier, the bank said today. Readings less than zero signal contraction. [...]

The New York Fed began its Empire State gauge in 2001. It provides one of the month's earliest pictures of the state of manufacturing. The region's general economic index averaged 17.2 in 2007 and reached a record low of minus 22.2 in March. This month's survey was taken from June 2 through June 12.

Economists forecast the Empire State index would rise to minus 2 this month, according to the median of 51 projections in a Bloomberg News survey. Tomorrow, the Fed publishes its report for national industrial production in May. On June 19, the Fed's Philadelphia branch releases its own factory data.

Now, it would be easy for City people to shrug this off as immaterial to their own immediate circumstances, since everyone knows nothing is manufactured in New York City. This assumption, however, is false: the five boroughs contain 7,000 manufacturing enterprises employing roughly 100,000 workers.

Mark Twain said there are lies, damn lies and statistics and his adage applies to unemployment measurement. The Bureau of Labor Statistics (BLS) publishes six unemployment metrics monthly, each referred to in ascending order of inclusiveness of the unemployed as U-1, U-2, etc.

The measure reported by the media as the unemployment rate that severely undercounts the unemployed is referred to as U-3. The U-3 rate is obtained by dividing the narrowest definition of the unemployed by the work force.
The U-3 definition does not include whom the BLS calls discouraged and marginal workers, those who want a job but have given up the search because market conditions and personal experience indicate the process is futile.

U-6 Unemployment counts the marginal and discouraged plus those seeking full time employment but can only find part time work. The Federal Reserve tracks what it defines as the Augmented Unemployment rate, which I’ve read is equivalent to U-6 less part time workers. I couldn’t find any Augmented Unemployment releases on the Fed site and despite major data inclusion differences, some bloggers have used U-6 and the Fed’s stat interchangeably.