Richmond Fed Manufacturing: Activity Sluggish in October

Today the Richmond Fed Manufacturing Composite Index increased 4 points to -4 from last month's -8. had forecast -5. Because of the highly volatile nature of this index, we include a 3-month moving average to facilitate the identification of trends, now at -7.7, indicates contraction. The complete data series behind today's Richmond Fed manufacturing report (available here), which dates from November 1993.

Here is a snapshot of the complete Richmond Fed Manufacturing Composite series.

Richmond Fed Manufacturing

Here is the latest Richmond Fed manufacturing overview.

Fifth District manufacturing activity remained sluggish in October, according to the most recent survey by the Federal Reserve Bank of Richmond. New orders and backlogs decreased this month, while shipments flattened. Hiring activity strengthened mildly across firms and wage increases were more widespread. Prices of raw materials and finished goods rose more quickly in October, compared to last month.

Firms looked for better business conditions during the next six months. Manufacturers expected positive growth in shipments and in the volume of new orders. In addition, manufacturers looked for rising backlogs of new orders. Producers anticipated increased capacity utilization and looked for slightly longer vendor lead times.

Survey participants' outlook for the months ahead included moderate growth in hiring, while future wage increases outweighed declines in the October expectations index. Producers anticipated somewhat longer average workweeks. Firms expected faster growth in prices paid and prices received. Link to Report

Here is a somewhat closer look at the index since the turn of the century.

since 2000

Is today's Richmond composite a clue of what to expect in the next PMI composite? We'll find out when the next ISM Manufacturing survey is released (below).

Because of the high volatility of this series, we should take the data for any individual month with the proverbial grain of salt.