US Richmond Fed May composite index jumps to +13 from +3
The Richmond Fed's May manufacturing composite index surged to +13 from +3, signaling stronger factory activity in the Fifth District, while price pressures moderated slightly.
The Federal Reserve Bank of Richmond reported that its May manufacturing composite index rose sharply to +13 from +3 in April, indicating a notable improvement in factory activity across the Fifth District. The survey's future indexes for shipments and new orders also moved further into positive territory, while the employment expectations index jumped to 23 from 7, suggesting firms anticipate stronger hiring ahead.
For interest rate traders, the Richmond Fed data adds to a growing narrative of resilient regional manufacturing, which could influence the Fed's policy path. While the composite index surged, the report showed that the average growth rates of prices paid and prices received decreased somewhat in May, and firms expect price increases to moderate further over the next 12 months. This mixed signal — stronger activity but easing price pressures — may keep the Fed in a wait-and-see mode. For real-time rate quotes, check NowPrice's live data on US Treasury yields and fed funds futures.
Looking ahead, markets will focus on upcoming national manufacturing surveys, including the ISM manufacturing PMI for May, due next week. The Richmond Fed's employment expectations index, which rose sharply, will be watched for clues on whether labor market tightness persists. Any further acceleration in activity could reignite rate hike bets, while continued moderation in price growth would support a pause.