Monday, Monday: Empire State, homebuilder sentiment

Factory activity in New York State unexpectedly added some velocity this month.

The New York Fed's Empire State index USEMPM=ECI jumped a tidy 5.0 points to print at 20.6, its highest reading since November 2021, and contradicting the 4.6-point deceleration analysts predicted.

With this the index moves further into positive territory; an Empire State north of zero indicates monthly expansion.

Below the surface, new orders, shipments and employment improved, but supply availability continued to worsen. Delivery times lengthened substantially and inventories declined, according to the press release.

Input and selling prices—inflation predictors—rose and eased, respectively.

"At least some of the upturn in demand this year has reflected a wave of activity intended to get ahead of potential supply chain disruptions linked to the conflict in the Middle East, a support that probably will prove temporary," writes Oliver Allen, senior U.S. economist at Pantheon Macroeconomics. "The order backlog and delivery times components of the Empire State survey both jumped sharply in August, hinting that supply-chain pressures have intensified again as hostilities have resumed."