Ares
24th May 2011, 12:40 PM
As Raw Material Prices Increase At Highest Rate Since Index Inception.
The latest and last regional index confirms that the economy is now not only slowing its rate of expansion, but is in fact contracting. The narrative is plain ugly: "The index of overall activity was pushed into negative territory by weak readings for shipments and new orders, while employment growth held steady. Other indicators suggested additional softness. District contacts reported that capacity utilization turned negative and backlogs fell further, while delivery times grew more slowly. In addition, manufacturers reported an uptick in finished goods inventory growth." But not all is bad: for example those predicting inflation are once again proven correct: "Distrcit manufacturers reported that raw material prices increased at an average annual rate of 6.12 percent in May - the highest reading since the inception of our surve in December 1993 - compared to April's reading of 4.81 percent." Fear not: it is "transitory." And 82% of experts say no QE3 is coming so....
More from the report:
In May, the seasonally adjusted composite index of manufacturing activity—our broadest measure of manufacturing—fell sixteen points to -6 from April’s reading of 10. Among the index’s components, shipments decreased nineteen points to -13, new orders dropped twenty-five points to finish at -15, while the jobs index held steady at 14.
Other indicators were mostly weak. The index for capacity utilization moved down fourteen points to -12, and the backlog of orders index lost eighteen points to -19. The delivery times index declined thirteen points to end at 5, while our gauges for inventories were mixed in May. The finished goods inventory index edged up two points in May to end at 12, while the raw materials inventories index eased two points to 16.
And the latest spin from the apologists: since America doesn't really manufacture anything, who cares about manufacturing surveys. You can't make this up.
The two charts that matter:
<img src="http://www.zerohedge.com/sites/default/files/images/user5/imageroot/images/Richmond%20Fed_0.jpg"/>
<img src="http://www.zerohedge.com/sites/default/files/images/user5/imageroot/images/Richmond%20Fed%20Prices_0.jpg"/>
Full Report (http://www.richmondfed.org/research/regional_economy/surveys_of_business_conditions/manufacturing/2011/pdf/mfg_05_24_11.pdf)
Elsewhere, America sold 32,000 new homes in April, at a median and average sales prices of $217,900 and $268,900 respectively. On a NSA basis this is about 5.5 months of supply. For the first time in 2011, over 1000 houses priced more than $750,000 were sold in the month.
http://www.zerohedge.com/article/richmond-fed-collapse-atlantic-region-manufacturing-enters-contraction-raw-material-prices-i
The latest and last regional index confirms that the economy is now not only slowing its rate of expansion, but is in fact contracting. The narrative is plain ugly: "The index of overall activity was pushed into negative territory by weak readings for shipments and new orders, while employment growth held steady. Other indicators suggested additional softness. District contacts reported that capacity utilization turned negative and backlogs fell further, while delivery times grew more slowly. In addition, manufacturers reported an uptick in finished goods inventory growth." But not all is bad: for example those predicting inflation are once again proven correct: "Distrcit manufacturers reported that raw material prices increased at an average annual rate of 6.12 percent in May - the highest reading since the inception of our surve in December 1993 - compared to April's reading of 4.81 percent." Fear not: it is "transitory." And 82% of experts say no QE3 is coming so....
More from the report:
In May, the seasonally adjusted composite index of manufacturing activity—our broadest measure of manufacturing—fell sixteen points to -6 from April’s reading of 10. Among the index’s components, shipments decreased nineteen points to -13, new orders dropped twenty-five points to finish at -15, while the jobs index held steady at 14.
Other indicators were mostly weak. The index for capacity utilization moved down fourteen points to -12, and the backlog of orders index lost eighteen points to -19. The delivery times index declined thirteen points to end at 5, while our gauges for inventories were mixed in May. The finished goods inventory index edged up two points in May to end at 12, while the raw materials inventories index eased two points to 16.
And the latest spin from the apologists: since America doesn't really manufacture anything, who cares about manufacturing surveys. You can't make this up.
The two charts that matter:
<img src="http://www.zerohedge.com/sites/default/files/images/user5/imageroot/images/Richmond%20Fed_0.jpg"/>
<img src="http://www.zerohedge.com/sites/default/files/images/user5/imageroot/images/Richmond%20Fed%20Prices_0.jpg"/>
Full Report (http://www.richmondfed.org/research/regional_economy/surveys_of_business_conditions/manufacturing/2011/pdf/mfg_05_24_11.pdf)
Elsewhere, America sold 32,000 new homes in April, at a median and average sales prices of $217,900 and $268,900 respectively. On a NSA basis this is about 5.5 months of supply. For the first time in 2011, over 1000 houses priced more than $750,000 were sold in the month.
http://www.zerohedge.com/article/richmond-fed-collapse-atlantic-region-manufacturing-enters-contraction-raw-material-prices-i