Richmond Fed survey rebounds

Fifth District manufacturing remained soft in May, according to the most recent survey from the Richmond Fed. The composite index rose from a record low of −53 in April to −27 in May, remaining at its lowest level since 2009. All three components—shipments, new orders and employment—were above their April readings but still in contractionary territory. The index for local business conditions was also negative, but contacts expected conditions to improve in the next six months. 

Many survey participants reported decreases in employment and the average workweek in May. However, the indexes for wages and the availability of workers with the necessary skills were both close to 0. Respondents expected to see increases in both wages and available skills in the coming months. 

On average, growth of prices paid by manufacturing firms slowed in May, while that of prices received accelerated. The average growth rate of prices received surpassed that of prices paid. Contacts expected the growth rates of both prices paid and prices received to increase in the near future.