Richmond Fed Shows Contraction in Services and Manufacturing in October
The Federal Reserve Bank of Richmond has released its October Manufacturing Index and the report is signaling contraction in that district. Today's data showed that both manufacturing and services posted declines during October.
In manufacturing, the seasonally adjusted index of overall activity was pushed lower as all broad indicators of activity with shipments, new orders and employment all coming in negative territory. In October, the seasonally adjusted composite index of manufacturing activity fell by eleven points to −7 from a reading of 4 in September:
- Shipments fell eighteen points to −9.
- New orders moved down 13 points to finish at −6.
- And the jobs index held steady at −5.
In services, the bank said, "Although retail sales inched up, overall revenues were held in check by flat revenues at non-retail services firms. Inventory build-up slowed. Big-ticket sales drifted lower and shopper traffic declined. Looking ahead six months, survey participants anticipated restrained demand for goods and services." Revenues in the overall service sector slowed in October, pulling the index down to 3 from 11 in September. Here were the numbers:
- The index for the number of employees remained flat, inching up a point to −1.
- Average wages rose by three points to 11.
- The expectations index settled at 6 in October, following last month's reading of 9.
The Richmond Fed data usually does not move the markets, but it is worth noting that is under President Jeffrey Lacker and he has been a dissenting voice inside the Federal Reserve.
JON C. OGG
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