Tuesday, August 27, 2019

Richmond Fed: "Manufacturing Activity Was Moderate in August"

by Calculated Risk on 8/27/2019 10:10:00 AM

From the Richmond Fed: Manufacturing Activity Was Moderate in August

Fifth District manufacturing activity was moderate in August, according to the most recent survey from the Federal Reserve Bank of Richmond. The composite index rose from −12 in July to 1 in August, buoyed by increases in the indexes for shipments and new orders. However, the third component, employment, fell.
...
Survey results suggested that many firms saw employment decline while the average workweek increased in August. Respondents reported persistent wage growth but still struggled to find workers with the necessary skills.
emphasis added
This was the last of the regional Fed surveys for August.

Here is a graph comparing the regional Fed surveys and the ISM manufacturing index:

Fed Manufacturing Surveys and ISM PMI Click on graph for larger image.

The New York and Philly Fed surveys are averaged together (yellow, through August), and five Fed surveys are averaged (blue, through August) including New York, Philly, Richmond, Dallas and Kansas City. The Institute for Supply Management (ISM) PMI (red) is through July (right axis).

The regional surveys were weak again in August, but slightly better than in July.

Based on these regional surveys, it seems likely the ISM manufacturing index for August will be weak again.