Manufacturing activity in the New York-area shrank at its fastest pace since the financial crisis.
The New York Fed's empire state index fell thirteen points to -19.37 in January, from a revised reading of -6.21 in December. This was the sharpest fall than at any time since the 2007-09 recession.
"The new orders and shipments indexes plummeted, indicating a step decline in both orders and shipments," the New York Fed said.
"Price indexes suggested that both input prices and selling prices increased."
"Labour market conditions continued to deteriorate, with employment indexes remaining in negative territory."
The six-month outlook was also noticeably weaker, with the index for future general business conditions falling to its lowest level since early 2009, indicating manufacturers in the New York-area felt less confident.
The US manufacturing sector has been hampered by the strong dollar which makes its exports less competitive internationally, and a darkening global economic outlook.