The Richmond Fed manufacturing index surged to 14 in August.
This crushed expectations for a rise to zero, from -11 in July. The slump in July was led by a slowdown in retail sales.
Moreover, manufacturers were upbeat about business prospects for the next six months. The index for expected shipments surged to 36, from 24 in July.
Below is an overview of the data from the release:
Fifth District manufacturing activity strengthened in August, according to the most recent survey by the Federal Reserve Bank of Richmond. Shipments, new orders, and capacity utilization rose. Additionally, the ongoing decline in the backlog of orders slowed this month. Vendor lead-time flattened and finished goods inventories grew a bit more slowly. Employment measures improved as well; the number of employees expanded modestly, and the average work week also picked up. Average wages increased.
Manufacturers expected greater strength in the six months ahead. Expectations rose across all categories measured: new orders and shipments, backlogs, capacity utilization, and vendor lead time. Capital expenditures were also projected to expand further. Producers anticipated modest growth in the number of employees and a somewhat longer average workweek. In addition, they expected average wages to increase briskly.
Raw materials and finished goods prices grew more slowly in August. However, compared to a month ago, survey participants expected faster future price increases for both raw materials and finished goods.
Here’s a look at the trajectory of the Richmond Fed manufacturing index: