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Tuesday, November 26, 2019

Richmond Fed: Manufacturing Activity Softened in November

by Calculated Risk on 11/26/2019 02:44:00 PM

From the Richmond Fed: Manufacturing Activity Softened in November

Fifth District manufacturing activity softened in November, according to the most recent survey from the Richmond Fed. The composite index fell from 8 in October to −1 in November, weighed down by negative readings for shipments and new orders, while the third component — employment — declined but remained positive. Manufacturing firms also reported a drop in backlog of orders, but the indicator for local business conditions held fairly steady. Survey respondents were optimistic that conditions would improve in the coming months.

Survey results suggested modest employment growth and rising wages in November. However, firms continued to struggle to find workers with the necessary skills. Respondents expected this struggle to persist and employment and wages to continue to grow in the near future.
emphasis added
This was the last of the regional Fed surveys for November.

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

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