Richmond Fed Manufacturing: Activity Strengthens in December
Today the Richmond Fed Manufacturing Composite Index increased 4 points to 8 from last month's 4. Investing.com 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 2.7, indicates expansion. 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.
Here is the latest Richmond Fed manufacturing overview.
Fifth District manufacturing activity expanded in December. The volume of new orders picked up compared to last month and shipments increased. Manufacturing employment softened, while wage increases were more widespread across firms. Prices of raw materials rose more quickly in December, while prices of finished goods rose at a somewhat slower rate.
Manufacturers were optimistic about future business conditions. Firms expected robust growth in shipments and in the volume of new orders. Additionally, survey participants looked for backlogs to build more quickly in the months ahead and anticipated increased capacity utilization. Expectations were for slightly longer vendor lead times.
Producers anticipated an increase in hiring along with broader wage gains during the next six months, while they planned for longer workweeks. For the six months ahead, producers 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.
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.