Richmond Fed Manufacturing: Continued Optimism in April

Today the Richmond Fed Manufacturing Composite Index decreased 2 points to 20 from last month's 22. had forecast 16. Because of the highly volatile nature of this index, we include a 3-month moving average to facilitate the identification of trends, now at 19.7, 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.

Richmond Fed Manufacturing

Here is the latest Richmond Fed manufacturing overview.

Manufacturers in the Fifth District were upbeat again in April, according to the latest survey by the Federal Reserve Bank of Richmond. The index for shipments rose and the index for new orders remained very strong. Even though the index for employment fell, the composite index for manufacturing remained high, with a reading of 20 in April compared to 22 in March. This was the first time since 1994 that the composite index remained at or above 20 for two consecutive months. The majority of firms continued to report longer workweeks and increased wages.

Looking six months ahead, manufacturing executives remained generally optimistic, although many of the indexes fell slightly from their March readings. The only two indexes that increased were expected capacity utilization and expected capital expenditures. Nonetheless, the expected shipments index had a strong reading of 42 in April and the expected new orders index was 46.

Survey respondents reported that growth in prices paid rose somewhat while growth in prices received moderated slightly. 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.