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Richmond Fed

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

By | Economy, General, Shopfloor Economics | No Comments

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

By | General, Shopfloor Economics | No Comments

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

Richmond Fed: Manufacturing Activity Stalled in August

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The Richmond Federal Reserve Bank said that manufacturing activity stalled in August, pulling back from three months of rebounding sentiment. The composite index of general business activity declined from 13 in July to zero in August, its lowest level since April. Manufacturers reported weaker activity across-the-board, with only marginal growth in new orders (down from 17 to 1) and employment (unchanged at 1) and reductions in shipments (down from 16 to -4) and capacity utilization (down from 9 to -5) levels. There have been a number of headlines so far this year, including a strong dollar, sluggish global growth and reduced crude oil prices. These data suggest that the sector has not fully emerged from those challenges despite some progress since the spring months. Read More

Monday Economic Report – June 29, 2015

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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. Read More

Richmond Fed: Manufacturing Activity Expanded at Fastest Rate since January

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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. Read More

Monday Economic Report – June 1, 2015

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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. Read More

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

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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. Read More

Monday Economic Report – May 4, 2015

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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. Read More

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

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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. Read More

Monday Economic Report – March 30, 2015

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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. Read More