Empire Manufacturing Stronger Than Expected

The NY state manufacturing index unexpectedly held on to most of its surprise jump last month to its highest level in more than a year. Last month it rose to 26.5, and this month it softened back to 25.1 (consensus 18). This indicates the area is experiencing continued expansion in manufacturing output and demand. New orders and shipments fell. Inventories rose from a five year low, as the outlook improved. Both prices paid and received slipped in July, indicating that inflation pressures may be abating.