Empire State came in very strong and right at expectations, at 22.6 in July. Strength is always good news unless it's accompanied by overheating but in today's report there's a little less stress in supply chain indications.
Unfilled orders show no change in the month which points to less production stress in future months, and delivery times, though still lengthening, are lengthening to a much less degree than prior months. The workweek is also showing less stress while input costs, which like delivery times are still elevated, are also easing a bit. Employment, at 17.2, is very strong but down nearly 2 points from May.
But the fundamental strength of this report, that is new orders, continue to pour in, at 18.2 which is down 3.1 points from May but still pointing to unusual demand for this sample's goods. Shipments, at 14.6, slowed in the month and may be getting held down by a draw in raw material inventories, where scarcity could be tied to delivery delays and other capacity issues.
This is yet another very good report for a factory sector that is proving a strong driver of the 2018 economy. Watch tomorrow for the industrial production report where major June strength is the expectation.