Richmond Fed Manufacturing Survey Improves In June 2018

Of the four regional Federal Reserve surveys released to date, all are in expansion.

Market expectations from Nasdaq / Econoday was 14 to 16 (consensus 16). The actual survey value was 20 [note that values above zero represent expansion].

Fifth District manufacturing continued to expand in June, according to results of the most recent survey from the Richmond Fed. The composite manufacturing index rose from 16 in May to 20 in June, buoyed by an increase in all three components (shipments, new orders, and employment). Firms also saw an increase in backlog of orders, as the index rose to its highest value of this year. Respondents were optimistic in June, expecting growth to continue across most indicators.

While survey results suggest a rise in employment in June, firms continued to struggle to find employees with the skills they needed, as this indicator fell from −3 in May to −14 in June, indicating further contraction. In spite of expectations of continued shortages, manufacturers expect payrolls to expand further in coming months.

On balance, manufacturers reported that price increases accelerated in June. In fact, the average increase in current prices paid reached its highest level since November 2012. However firms expect growth in both prices paid and prices received to slow in the next six months.

Summary of all Federal Reserve Districts Manufacturing:

Richmond Fed (hyperlink to reports):

z richmond_man.PNG

Kansas Fed (hyperlink to reports):

z kansas_man.PNG

Dallas Fed (hyperlink to reports):

z dallas_man.PNG

Philly Fed (hyperlink to reports):

z philly fed1.PNG

New York Fed (hyperlink to reports):

z empire1.PNG

Federal Reserve Industrial Production – Actual Data (hyperlink to report):

Holding this and other survey’s Econintersect follows accountable for their predictions, the following graph compares the hard data from Industrial Products manufacturing subindex (dark blue bar) and US Census manufacturing shipments (lighter blue bar) to the Richmond Fed survey (darkest bar).

In the above graphic, hard data is the long bars, and surveys are the short bars. The arrows on the left side are the key to growth or contraction.

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