Richmond Fed Manufacturing Index Declines Sharply

Manufacturing activity in the Fifth District contracted in December, with the Richmond Fed Manufacturing Index declining sharply by 22 points to minus 8, a negative surprise to analysts whose consensus forecasts called for an unchanged reading. The decline was driven by a 37-point drop in shipments to minus 25, the lowest reading since April 2009, and a decline of 26 points to minus 9 in the volume of new orders. Respondents also reported a sharp 30-point deterioration in local business conditions to minus 25, the lowest reading on record for the survey.