The regional manufacturing reports are not having a good go of it this month. The Richmond Fed Region took a huge dive from +10 to -11. New orders lead the collapse, down a whopping 35 points to -20. The Empire State and Philly Fed reports were also weak.
Richmond Fed Synopsis
Disastrous Numbers
- Index Down 21 points to-10
- Shipments down 21 points to -14
- New orders down 35 to -20
- Order Backlog down 22 points to -1
- Capacity utilization down 22 points to -19
- Wages Up 7 points to +21
- Finished goods inventories up 9 points to+21
- Raw materials inventories up 4 points to +27
Inventories up, employment up, wages up. Shipments and new orders plunged. What a disaster, and it’s not just this regional report.
Disastrous Manufacturing August
- August 15: Empire State Manufacturing Index Dips 5 Points to -4.2
- August 18: Peeking Under the Hood of the Philly Fed Manufacturing Positive Headline
- August 23: Richmond Fed Manufacturing Disaster: Activity, New Orders, Shipments Plunge This Report
Mike “Mish” Shedlock
On the other hand, the very slow pace of the housing recovery is picking up steam with new home sales up 12.4% in July.
I used to work in the housing industry. Most new home sales take place on weekends. Last July had 20% more weekends (that is 5 weekends instead of 4) than most months do. Taking that into account, a 12.4% increase seems almost below average. Once again, the devil is in the details.
Do not get too giddy Shamrock. Housing is up in the south. New homes so this is likely retirees relocating from the snow belt.
If you jimmy the data to match the narrative of the election, eventually you will have to reconcile it into balance. Good, just in time for the election. Democrats were never good at “maff”.
Bullish! Means moar QE.
A bit of anecdotal lore. On a driving trip from the Midwest to the east coast I observed lite to moderate truck traffic. Even in the northeast corridor. Also, my brother, who works in an economically leading edge mfg. business says orders are down. Things might be good in travel and Healthcare but not mfg.