Richmond Fed Manufacturing: Activity Strengthens in January

Today the Richmond Fed Manufacturing Composite Index increased 4 points to 12 from last month's 8. had forecast 7. Because of the highly volatile nature of this index, we include a 3-month moving average to facilitate the identification of trends, now at 8.0, 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.

Richmond Fed Manufacturing

Here is the latest Richmond Fed manufacturing overview.

Fifth District manufacturing activity strengthened in January, with continued growth in new shipments and the volume of new orders. Employment picked up, although increases in average manufacturing wages were less widespread than in December. The average workweek continued to grow, but increases were less prevalent in January than a month earlier. Growth in input prices moderated, while growth in prices of finished goods accelerated.

Expectations for shipments in the next six months were upbeat, and survey participants' outlook for the volume of new orders continued to be optimistic. Manufacturers anticipated longer lead times and increasingly planned for more hiring and higher wages. Despite a decline in the current month's average workweek index, producers continued to expect a longer workweek during the six months ahead.

Survey respondents looked for prices of inputs to rise more rapidly over the first half of 2017, while they anticipated slower increases in prices received for their goods. 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.