Tag: Richmond Fed

Monday Economic Report – June 29, 2015

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

Last week, there were several reminders that the manufacturing sector has not recovered fully from economic weaknesses earlier in the year, even as business leaders remain cautiously optimistic about activity in the coming months. Durable goods orders declined 1.8 percent in May, extending April’s 1.5 percent decrease. Much of this softness stemmed from reduced aircraft sales, with orders excluding transportation modestly higher. Nonetheless, durable goods demand has been quite weak for much of the past year. On the positive side, we would expect stronger durable goods orders in the June data, with the recent Paris Air Show lifting aircraft sales, and the broader measure, which excludes transportation, has edged marginally higher over the past three months. We hope that this is the start of a rebound. (continue reading…)

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Richmond Fed: Manufacturing Activity Expanded at Fastest Rate since January

The Richmond Federal Reserve Bank reported that manufacturing activity expanded at its fastest pace since January – a sign that the sector has made progress since the spring. The composite index of general business activity improved from 1 in May to 6 in June. This figure was boosted, in particular, by stronger new orders (up from 2 to 11), its highest level since October. Shipments (up from -1 to zero) were unchanged for the month, but that represented some stabilization after four straight months of contraction. Overall, this report found modest growth in the manufacturing sector in the Richmond Fed district, which – while not as strong as we might prefer – found sentiment moving in the right direction. (continue reading…)

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Monday Economic Report – June 1, 2015

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

The U.S. economy shrank in the first quarter for the second year in a row, with revised data showing that real GDP declined by 0.7 percent. This was down from an earlier estimate of 0.2 percent growth. Overall, this was a disappointing start to 2015. That is particularly true when you look at the optimism that many businesses had at the start of the year. Yet, manufacturers faced a number of significant headwinds in recent months, including weaknesses abroad, a strong U.S. dollar, lower crude oil prices, the residual effects of the West Coast ports slowdown, bad weather in some regions of the country and a still-cautious consumer. (continue reading…)

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Richmond Fed: Manufacturing Activity Expanded Ever-So-Slightly in May

The Richmond Federal Reserve Bank said that manufacturing activity expanded ever-so-slightly in May, an improvement after contracting in both March and April. The composite index of general business activity improved from -3 in April to 1 in May. The underlying data were also better, including new orders (up from -6 to 2) and capacity utilization (up from -4 to 7). Shipments (up from -6 to -1) continued to contract, but at a slower pace of decline for the month. At the same time, the labor market was mixed. The rate of employment growth (down from 7 to 3) eased somewhat, but the average workweek (up from 4 to 6) and wages (up from 9 to 20) were stronger. (continue reading…)

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Monday Economic Report – May 4, 2015

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

The U.S. economy stagnated in the first quarter, with real GDP growing by just 0.2 percent. This compares to a consensus estimate of 1.1 percent, and it was lower than the 5.0 percent and 2.2 percent growth rates observed in the third and fourth quarters of 2014, respectively. As one might expect from a data point that is just shy of zero, the underlying contributions to growth were mixed. Net exports and government spending were drags on activity in the first quarter, particularly with headwinds from a stronger dollar. Consumer spending on goods and nonresidential fixed investment were also weak, with the latter experiencing sharp declines stemming from the energy market and its supply chain. The bright spots—to the extent that you could call them that—were service-sector spending and a rebound in inventories. (continue reading…)

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Richmond Fed: Manufacturing Activity Contracted for the Second Straight Month in April

The Richmond Fed said that manufacturing activity remained soft in April, contracting for the second straight month. If there was a silver lining, it was that several key indicators declined by less in this report. The composite index of general business conditions improved from -8 in March to -3 in April. Along those lines, the pace of the decline eased for a number of indices, including new orders (up from -13 to -6), shipments (up from -13 to -6) and capacity utilization (up from -7 to -4). It was the third consecutive monthly decrease in new orders, reflecting weaker demand. (continue reading…)

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Monday Economic Report – March 30, 2015

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

As we have seen in past weeks, economic data continue to reflect dampened activity in the early months of 2015 as a result of a number of significant headwinds. These challenges range from weak economic growth abroad, to a significantly strengthened U.S. dollar, to the sharp drop in crude oil prices. Weather and the West Coast ports slowdown have also been relevant factors in some of the softness that we have seen in the reports released since December. As a result, the first quarter is likely to grow around 1.8 percent. This would be less than the 2.2 percent growth rate in real GDP seen during the fourth quarter. Nonetheless, I am predicting 2.8 percent growth in real GDP in 2015, reflecting a slight deceleration in my outlook for the year. The expectation is that we will see some rebounds moving forward, with manufacturers continuing to be more upbeat about the coming months, even with some challenges likely to continue. (continue reading…)

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Richmond Fed: Manufacturing Activity Contracted in March

The Richmond Federal Reserve Bank said that manufacturing activity contracted in March, declining for the first time in 12 months. The composite index of general business conditions decreased from zero in February to -8 in March. The underlying data were lower across-the-board, reflecting weaknesses for the month in terms of overall activity and a deterioration from February’s numbers. This included new orders (down from -2 to -13), shipments (down from -1 to -13), capacity utilization (down from -4 to -7) and the average workweek (up from -6 to -4). 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. On the positive side, hiring (up from 4 to 6) continued to grow modestly, providing some encouragement moving forward. (continue reading…)

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Monday Economic Report – March 2, 2015

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

While manufacturers remain mostly optimistic in their outlook, we have seen softness in a number of recent economic indicators. Slower economic growth internationally, a stronger U.S. dollar, reduced crude oil prices and the West Coast ports slowdown have been cited as reasons for this weaker-than-desired performance. Along those lines, real GDP growth in the fourth quarter was revised lower, down from 2.6 percent to 2.2 percent. In addition, surveys from the Dallas, Kansas City and Richmond Federal Reserve Banks all reflected decelerated levels of new orders and exports. Most notably, Texas manufacturers have been adversely impacted by the sharp drop in petroleum prices, dampening demand throughout the energy supply chain and for the larger regional economy. Yet, even in the Dallas report, respondents continued to be more positive than negative in their expectations for sales, production, employment and capital spending over the next six months. (continue reading…)

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Richmond Fed: Manufacturing Activity Stagnated in February

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. (continue reading…)

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