Stronger dollar is still restraining U.S. factory sector activity

The modest rebound in the Empire State manufacturing index to +3.1 in May, from -1.2, indicates that the stronger dollar is still restraining factory sector activity. 

Nevertheless, the drop back in the dollar over the past month will provide a little relief. Furthermore, the survey evidence on the services sector is much more upbeat. 

"Even if export-orientated manufacturers continue to struggle, stronger domestic demand can still drive a pick-up in GDP growth." says Capital Economics