Activity has been so strong in the Philly Fed region, as it was in Monday's Empire State report, that delivery times are spiking. For the 6th month in a row, times slowed with the rate of April's slowing, at 13.2, the longest in 13 years and one of the longest in the 50 year history of this report. And business keeps rolling in which points to greater congestion ahead. The new orders index has been unusually strong, at 27.4 which outside of 38.6 and 38.0 in March and February, is the strongest rate of monthly growth in 6 years. Unfilled orders keep piling up, at 6.6 for a 6th straight monthly gain which is a rare streak for this reading.
Shipments are strong and the workweek is up and the sample is hiring, the latter at 19.9 which is yet another 6-year high for this report. Inflation data show a little less heat than March though costs are still elevated with pass through to selling prices evident.
Dislocations indicated by delivery times can obscure the meaning of some readings, especially inventories which are up sharply to 17.8 and a 44-year high. The giant build is likely a mix of intended stocking of raw materials in anticipation of strong production ahead but also a piling up of finished goods that are waiting to be delivered.
Philly was the first of the advance reports to catch fire and though government data out of Washington have yet to show anywhere near the strength of this or other regional reports, the slowing in delivery times is tangible enough evidence of unusual factory acceleration underway, at least in the Northeast.