Stat of the Day: Richmond Fed Jumps Back to Recovery Highs
The Richmond Fed reported today the December number jumped 16 points to 25. A reading close to the highs reached this summer and higher then any activity of the last 10 year. It appears that manufacturing is ending 2010 on a very high note. The Richmond Fed isn't typically seen as an important region, but it does provide the earliest insight into the December activity.
The important sub-components of Shipments and New Orders jumped to roughly 30 with the Shipments recording a new recovery high. Also interesting is that inventory levels of both finished goods and raw materials dropped signaling manufacturers will need to restock supplies.
Hiring conditions continued to improve at a moderate pace over November. Wage growth doubled so that is concerning for profit margins if it is to continue.
All in all a very solid report considering the October activity was approaching flat and within 2 months it has soared all the way to 25. Backlog Orders have gone from -12 to 14 showing the dramatic change. 2011 should be off to a strong start based on this report. Now we'll wait for the Chicago PMI on the 30th for confirmation. The market is expecting a slight dip to 61 from the 62.5 in November. The Richmond report suggests some upside to that estimate.
The important sub-components of Shipments and New Orders jumped to roughly 30 with the Shipments recording a new recovery high. Also interesting is that inventory levels of both finished goods and raw materials dropped signaling manufacturers will need to restock supplies.
Hiring conditions continued to improve at a moderate pace over November. Wage growth doubled so that is concerning for profit margins if it is to continue.
All in all a very solid report considering the October activity was approaching flat and within 2 months it has soared all the way to 25. Backlog Orders have gone from -12 to 14 showing the dramatic change. 2011 should be off to a strong start based on this report. Now we'll wait for the Chicago PMI on the 30th for confirmation. The market is expecting a slight dip to 61 from the 62.5 in November. The Richmond report suggests some upside to that estimate.
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