More economic data is out for the markets to chew on. The good news is that inflation appears to be remaining nonexistent. The bad news is that manufacturing in the New York area is dipping into contraction rather than holding on to modest growth.

The Labor Department reported on the Producer Price Index (PPI) to cover inflation at the wholesale and production level. This came in at -0.7% on the headline report for the month of April, matching the Bloomberg consensus estimate of -0.7%. If you measure PPI’s core rate on an ex-food and ex-energy basis, this rose by 0.1%, which is just under the 0.2% gain expected from Bloomberg.

We are seeing contraction from the New York Federal Reserve on the Empire State Manufacturing Survey. May’s report fell to -1.43, and the range of estimates was 0.0 to 8.5 for the month. The Bloomberg consensus was 3.75 and the April report was 3.05. Rather than ticking up or remaining positive, the report was down in the contraction area and worse than every single economist expected.

PPI was of no surprise at all, but the dip in New York manufacturing activity is a real disappointment. Stocks are still trying to find their footing and remain in negative territory. S&P futures are down three at 1,645.25, and DJIA futures are down 18 points at 15,157 so far this morning.

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