Global| Sep 23 2014Richmond Federal Reserve Reports Continued Improvement in Activity
by:Tom Moeller
|in:Economy in Brief
Summary
The Federal Reserve Bank of Richmond reported that its September Composite Index of Manufacturing Sector activity improved to 14 from 12 in August. It was the highest level since February 2011. Driving the index higher was improvement [...]
The Federal Reserve Bank of Richmond reported that its September Composite Index of Manufacturing Sector activity improved to 14 from 12 in August. It was the highest level since February 2011. Driving the index higher was improvement in several component series. Leading the gains were the employment and the orders figures, each rising to the highest levels in over three years. Also firm were the shipments and the average workweek components. To the downside were the orders backlog, capacity utilization & vendor lead time series. The prices paid series gained modestly but remained in the range of the last two years. Finished goods inventory levels were shown to have soared.
Gauges of expected conditions in six months also remained strong, notably shipments, orders & employment, although slight m/m declines were registered for September. The wages series soared as did the indication of future capital expenditures.
The Richmond Fed also produces figures which gauge service sector performance. The revenue measure was unchanged m/m at the highest level since early-2012. The expected prices paid series also remained elevated. The employment, wage and product demand figures each remained down somewhat from the very recent highs.
The Richmond Fed figures are diffusion indexes which are calculated by subtracting the percent of respondents reporting poorer business conditions from those reporting improvement. Thus, they have a good correlation with growth in the series covered. The data is available in Haver's SURVEYS database.
| Federal Reserve Bank of Richmond Survey | Sept | Aug | Jul | Sept'13 | 2013 | 2012 | 2011 |
|---|---|---|---|---|---|---|---|
| Composite Factory Sector Diffusion Index (% Increasing) | 14 | 12 | 7 | 0 | 2 | 2 | 4 |
| Shipments | 11 | 10 | 3 | -1 | 3 | 3 | 4 |
| New Orders Volume | 14 | 13 | 5 | 3 | -0 | 0 | 2 |
| Number of Employees | 17 | 11 | 13 | -3 | 2 | 3 | 7 |
| Prices Paid (%) | 2.1 | 1.4 | 2.0 | 2.1 | 1.6 | 1.9 | 3.8 |
| Service Sector (% Increasing) | |||||||
| Revenues | 21 | 21 | 12 | 12 | 6 | 5 | 6 |
| Number of Employees | 13 | 17 | 9 | 5 | 2 | 2 | 4 |
| Prices (%) | 1.6 | 1.5 | 1.2 | 1.3 | 1.2 | 1.2 | 0.9 |
Tom Moeller
AuthorMore in Author Profile »Prior to joining Haver Analytics in 2000, Mr. Moeller worked as the Economist at Chancellor Capital Management from 1985 to 1999. There, he developed comprehensive economic forecasts and interpreted economic data for equity and fixed income portfolio managers. Also at Chancellor, Mr. Moeller worked as an equity analyst and was responsible for researching and rating companies in the economically sensitive automobile and housing industries for investment in Chancellor’s equity portfolio. Prior to joining Chancellor, Mr. Moeller was an Economist at Citibank from 1979 to 1984. He also analyzed pricing behavior in the metals industry for the Council on Wage and Price Stability in Washington, D.C. In 1999, Mr. Moeller received the award for most accurate forecast from the Forecasters' Club of New York. From 1990 to 1992 he was President of the New York Association for Business Economists. Mr. Moeller earned an M.B.A. in Finance from Fordham University, where he graduated in 1987. He holds a Bachelor of Arts in Economics from George Washington University.
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