Empire State Manufacturing Index Very Strong

There's only a slight hint of slack appearing in the Empire State index which hit Econoday's consensus with a very strong 18.0 and the first indication on this month's factory conditions.

New orders remain robust at 19.5 with shipments even more robust at 22.4. But unfilled orders are in the negative column for a second month in row, at minus 8.7 following November's minus 4.6, and labor expansion is slowing, to 5.1 for a 6.4 point decline. Another hint of slowing comes from 6-month expectations for new orders which are down a sizable 12.6 points to what is still however a very solid 41.1 for this reading. Delivery times, after contracting in November, are once again lengthening while input costs and selling prices are both on the rise, all signals of possible capacity constraints and potential overheating.

Signs of easing in unfilled orders and employment aside, this report suggests that December's factory activity will be near maximum strength. Watch later this morning for the manufacturing component of the industrial production report for the first hard economic data on November's factory activity.

Recent History Of This Indicator:
Empire State slowed in November in what was a welcome result given this year's long run of unsustainable strength in this report. Yet readings were still very strong with the headline index coming in at 19.4 with December's consensus at 18.0.