Tag

inflation

Richmond Fed: Manufacturing Activity Improved in July after a Weak June

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The Richmond Federal Reserve Bank said that manufacturing activity in its district improved in July after weakening once again in June. The composite index of general business activity rebounded from -10 in June, its lowest reading since January 2013, to 10 in July. Indeed, the underlying data recovered across-the-board in this report, including new orders (up from -17 to 15), shipments (up from -8 to 7), capacity utilization (up from -11 to 3) and the average workweek (up from -7 to 1). In addition, manufacturers in the region accelerated their employment growth (up from 1 to 6) somewhat. Each of these indices were encouraging. Yet, this report has been highly volatile so far this year from month-to-month, with the headline number ranging from -10 in June to 17 in March. Hopefully, the expansion seen in July can be sustained moving forward. Read More

Richmond Fed: Manufacturers Reported Improved Activity in December, But Still Soft

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The Richmond Federal Reserve Bank reported improved activity in December, rebounding after three straight months of declines. The composite index of general business activity rose from -3 in November to 6 in December, its first positive reading since July. (The measure was zero in August.) As such, manufacturers in the district ended 2015 with better news, even as overall conditions remained relatively soft. The higher headline number stemmed largely from improvements in new orders (up from -6 to 8), capacity utilization (up from zero to 2), employment (up from zero to 12) and the average workweek (up from -3 to 7). At the same time, shipments (up from -2 to zero) and the backlog of orders (up from -16 to zero) stabilized for the month. Read More

Richmond Fed: Manufacturing Activity Declined for the Third Straight Month in November

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The Richmond Federal Reserve Bank said that manufacturing activity declined for the third straight month in November, highlighting recent challenges in the sector in the district. The composite index of general business activity declined from -1 in October to -3 in November. Manufacturers reported reduced growth in new orders (down from zero to -6), shipments (up from -4 to -2) and the average workweek (down from -5 to -3). Note that the pace of decline eased for both shipments and the workweek, and similarly, capacity utilization (up from -14 to zero) stabilized after falling sharply the month before. At the same time, employment continued to pull back from modest gains in prior months. Hiring (down from 3 to zero) stagnated in November, with wage growth (down from 17 to 6) slowing. Read More

Personal Spending Picked Up Strongly in May

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The Bureau of Economic Analysis said that personal spending rose 0.9 percent in May, rebounding from a more-cautious 0.1 percent growth rate observed in April. It was the fastest monthly growth rate since August 2009. From the manufacturing perspective, this was welcome news, with spending on durable and nondurable goods up 2.2 percent and 1.9 percent, respectively. More importantly, it provides some encouragement that Americans might return to opening their wallets – something that there has been more hesitance to do so far this year. The year-over-year rate of personal spending in May, 3.6 percent, was the highest since December, up from 3.1 percent since in April. Read More

Richmond Fed: Manufacturing Activity Stagnated in February

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The Richmond Federal Reserve Bank said that manufacturing activity stagnated in February, ending 10 straight months of expansion in the district. The composite index of general business conditions declined from 6 in January to zero in February, its lowest level since contracting in March 2014. Indeed, many of the underlying measures slipped into negative territory in February. This included new orders (down from 4 to -2), shipments (down from 10 to -1), capacity utilization (down from 9 to -4) and the average workweek (down from 8 to -6). As such, manufacturers clearly pulled back in a number of areas for the month, likely due to global slowness, a stronger dollar and reduced commodity prices. Read More

Monday Economic Report – January 26, 2015

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Here is the summary for this week’s Monday Economic Report: 

The European Central Bank (ECB) finally announced its long-awaited quantitative easing program on Thursday. The ECB will purchase 60 million euros in bonds each month until September 2016—totaling at least 1.1 trillion euros overall—in an attempt to stimulate growth. Depending on where the Eurozone economy stands pointing September 2016, the ECB might extend its purchasing beyond that point. The impact on the euro was almost immediate, with the euro exchanging for $1.1206 at Friday’s close, down from $1.3927 on March 17, the high point of 2014. This will complicate manufacturers’ ability to sell goods into Europe, something that was mentioned in the sample comments in the latest Kansas City Federal Reserve Bank’s monthly survey (see below). Read More

Monday Economic Report – January 20, 2015

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Here is the summary for this week’s Monday Economic Report: 

Financial markets around the world continued to react to the softening global economic environment. In particular, foreign exchange markets were rocked by news that Switzerland would no longer support its cap on the franc, where that currency has been seen as a safe haven, particularly against the euro. Almost immediately, the Swiss franc appreciated sharply against the euro and other currencies. For its part, the euro has continued to depreciate against the U.S. dollar, with one euro selling for $1.1581 on Friday. This was down $1.3927 on March 17, the high point of 2014, representing an appreciation of more than 17 percent for the U.S. dollar against the euro. These developments could hurt the ability of manufacturers in the United States to grow exports. Read More

Monday Economic Report – January 12, 2015

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Here is the summary for this week’s Monday Economic Report: 

The U.S. economy generated 2.95 million net new nonfarm payroll workers in 2014, the fastest annual pace since 1999. In addition, the unemployment rate fell to 5.6 percent, its lowest level since June 2008. One might quibble that these figures overstate the overall health of the labor market, with part-time employment and unemployment still being a challenge. Indeed, the participation rate remains near 30-year lows. Still, the data suggest movement in the right direction. Manufacturers, for instance, hired an additional 15,500 workers on average each month in 2014, with 762,000 more employees since the end of 2009. The sector currently employs just more than 12.2 million workers. Therefore, manufacturing employment has increased at a decent pace of late, consistent with a mostly upbeat outlook. Read More

Monday Economic Report – November 24, 2014

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Here is the summary for this week’s Monday Economic Report:

Central banks around the world have acted recently in an attempt to lift a sagging global economy. On Friday, for instance, the European Central Bank (ECB) announced that it has begun purchasing asset-backed securities, finally beginning a quantitative easing program that some have long sought. Earlier in the day, ECB President Mario Draghi said that “we will do what we must” to spur economic growth. In addition, the People’s Bank of China surprised markets by cutting interest rates on Friday. These actions followed the Bank of Japan’s announcement on October 31 that it would increase the amount of its monthly asset purchases. Read More

Producer Prices for Final Demand Goods Declined for the Fourth Straight Month

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The Bureau of Labor Statistics (BLS) said that producer prices for final demand goods and services rose 0.2 percent in October. Yet, that gain stemmed mainly from increased costs for food (up 1.0 percent) and services (up 0.5 percent). Producer prices for final demand goods fell for the fourth straight month, down 0.4 percent. Falling energy costs (down 3.0 percent) continue to force the overall headline number lower. Indeed, prices for final demand energy goods have declined 5.9 percent since June, helping to decelerate overall inflationary pressures for producers.

At the same time, food prices rebounded from a softer September. Through the first 10 months of 2014, prices for final demand foods have risen 4.8 percent. In October, cooking oils, eggs, fruits, meats and vegetables accounted for the bulk of the monthly jump in food costs, with those same categories responsible for the year-to-date gains. Read More