Manufacturing activity in the Fifth District expanded at a more robust
pace than expected in September, with the Richmond Fed Manufacturing
Index rising 5 points to 29. Leading the composite index higher despite
consensus forecasts calling for deceleration were shipments, up 10
points 33, and new orders, which rose 9 points from August to 34.
Countering the strong showing in other business activities was
employment, which deviated from usual strength exhibited in previous
months by falling 9 points to 16.
Other current conditions
components showing acceleration included backlog of orders, up 5 points
20, capacity utilization, up 2 points to 20, and capital expenditures,
which rose 8 points to 29. Local business conditions surged 14 points
higher to 27.
Despite the deceleration in the number of
employees, employment did show strength in other measures, with wages
rising 6 points to 33, the average working week up 3 points to 19 and
available skills became less negative by rising 6 points to minus 11.
Price
inflation accelerated in September after easing in the previous month,
both in prices paid and prices received, with input price growth
continuing to outpace outputs.
Signs of overheating in the
continuing expansionary acceleration of manufacturing in the Fifth
District contrast with cooling seen in other districts recently and
should give a boost to Fed hawkishness.
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