January Richmond Fed Plunges, Quadruple Dips In Biggest Miss To Expectations Since 2009

Tyler Durden's picture

So much for the latest "recovery." While everyone continued to forget that in the New Normal markets do not reflect the underlying economy in the least, and that the all time highs in the Russell 2000 should indicate that the US economy has never been better, things in reality took a deep dive for the worse, at least according to the Empire State Fed, the Philly Fed, and now the Richmond Fed, all of which missed expectations by a huge margin, and are now deep in contraction territory. Moments ago, the Richmond Fed reported that the Manufacturing Index imploded from a 9 in November, 5 in December and missed expectations of a 5 print at -12: this was the biggest miss to expectations since September 2009.

Read em and weep: 1, 2, 3 and 4 dips, a useful harbinger of what will happen to the housing market very soon too.

Activity Index

New Orders Index

Looking at the internals shows an atrocious picture: New Orders collapses from 10 to -17, Capacity Utilization tanked from 3 to -18, and number of employes dropped for the 2ndd month in a row, from 3 to -3 to -5. Ironically, not even the traditional fallback: "expectations" rose this time, declining from 20 to 18. But at least the hollow churn and channel stuffing continues unabated, as finished goods inventory doubled from 12 to 23.And to make sure the pain is complete, prices paid rose from 2.01 to 2.54 in January, making sure margins get squeezed "offsetting" plunging orders, and general business conditions. Or not.

From the report:



Manufacturing activity in the central Atlantic region declined in January following two months of modest expansion, according to the Richmond Fed's latest survey. Nearly all broad indicators of activity fell into negative territory. Other indicators also suggested additional softness. Capacity utilization turned negative as did the gauge for delivery times, while backlogs continued its downward trend. In addition, finished goods inventories grew at a slightly quicker pace.


In January, the seasonally adjusted composite index of manufacturing activity — our broadest measure of manufacturing — lost seventeen points to settle at ?12 from December's reading of 5. Among the index's components, shipments fell seventeen points to ?11, the gauge for new orders moved down twenty-seven points to end at ?17, and the jobs index slipped two points to ?5.


Other indicators also suggested weakening in January. The index for capacity utilization moved lower, subtracting twenty-one points to ?18, and the backlogs of orders lost eight points to end at ?19. The delivery times index turned negative, giving up seven points to end at ?4. The raw materials inventory index was virtually unchanged at 23, while the finished goods inventories gained nine points to also end at 23.


Hiring activity at Fifth District plants continued to edge lower in January. The manufacturing employment index slipped two points to settle at ?5 and the average workweek indicator lost two points to end at ?4. However, the wage index added one point to finish at 11.


District manufacturers reported that raw materials prices increased at an average annual rate of 2.54 percent, somewhat higher than December's reading of 2.01 percent. Finished goods prices rose at a 0.85 percent pace, slightly below December's reading of 1.57 percent.


Looking ahead six months, respondents on average expected that the prices they pay will advance at a 1.97 percent pace, somewhat below December's outlook of 2.54 percent. Contacts looked for finished goods prices to increase at a 1.11 percent annual rate, slightly above last month’s expectation for a 0.87 percent pace.

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GetZeeGold's picture



Damn.....not again.

camaro68ss's picture

Must print faster benny boy

DOT's picture

Should really pump up the print. Some snow or other transitory and completely catastrophic event may create a need for liquidity!

DeadFred's picture

Remember the good ole days when news like this would pump the market because people thought this means another QE? Now we're stuck with maybe they'll print a little more. The Bernanke put is dead, when the maket breaks support it will crash as everyone jumps at the same time. IMHO the only question is can the market break support with this much liquidity sloshing around? I think yes but time will tell.

Tippoo Sultan's picture

I believe this across-the-board decline cannot be blamed upon the weather, as it has been quite mild this past month. It must be something else -- some event in early November, perhaps, which cast a decidedly melancholy humour upon American business.

brak's picture

Ha!  yeah, every problem in the market* is a liquidity problem when the only tool you have is ctrl+p


*not an actual market anymore, but who are we kidding at this point

Gazooks's picture

Who would have thunk the gauling capability of the quantitative LIES accelerating to this truly unthinkable, unbelievable and surreal level?


entirely off topic, but this is getting way too little disemination and discussion given the broad and destabilizing implications.





there's many more pertinent links, note particularly FEMA's crisis acting school


(and, appologies for hijack, but this has urgency before tracks are covered.)

TruthInSunshine's picture

And the UofM Consumer Confidence Index dropped to a 1 year low (after surging to a multi year high last month).

Yeah, everything makes perfect sense. There's nothing completely batshit crazy, at all, about the global economy, the numbers being reported on a an (in)consistent basis (with wider and wider standard deviation events/reports), there's no epicly massive manipulation of shipping, production, purchasing or utilization data, and the currency wars haven't begun in earnest, either.


kridkrid's picture

If I would have known it was that kind of party I would have sticked my dick in the mashed potatoes.

El Hosel's picture

... Better to leave that to the xperts. DSK "sticked" his into the cleaning lady at his own party and lived happily ever after.

EscapeKey's picture

Remember, "we're all in this together".

Sudden Debt's picture

You didn't overextend yourself into debt ALONE!!

There's always somebody else to blame!

EscapeKey's picture

yeah i'm aware of everyone liking to find a scapegoat.

however, i fail to see how my actions as a taxpayer has allowed the central banks to continuously setup the biggest market collapse which is on its way.

Sudden Debt's picture

woman... always want to have the last word.... even if it's only a point without content... :)

EscapeKey's picture

sorry to disappoint you, but the pic is that of anna chapman.

i stand up while peeing.

Carl Spackler's picture

Stop the presses !

Inflation dead ahead.

Sure looks like there is some real COST PUSH INFLATION taking root out there in Bernanke's backyard...with wages at positive 11 and avereage workweek at negative 4 for January and wages at positive 10 and average workweek at negative 2 for December


slaughterer's picture

Just post-Christmas doldrums, nothing to worry about for a bull.

LawsofPhysics's picture

"Just post-Christmas doldrums, nothing to worry about for a bull with a printer." - fixed.

Groundhog Day's picture

Don't these ppl know they have to run the numbers past Benny and the White House BEFORE they announce them for fine tuning

takeaction's picture

So as I have learned from ZH...this is bullish..right?

StoleYourMoney's picture

These numbers aren't recessionary, are they?

TruthInSunshine's picture

No, because The Federal Reserve is about to announce a new, massive LSWAP program (Large Scale Widget Asset Purchase) using freshly minted fiatskis.

EscapeKey's picture

That's a great idea, for widgets - much like subprime bonds - are non-depreciating assets (when held by any of the banks).

world_debt_slave's picture

slow moving train wreck still on the rails

mayhem_korner's picture



...yeah, but it's speeding up.  Methinks it's emerged from Inception level 3 to Inception level 2.

GolfHatesMe's picture

Existing housing UNEXPECTEDLY falls 1%. 

Cult_of_Reason's picture

The economy is fine, just sell more VIX (NY Fed price target for VIX is 0.00) and buy stocks. Bernanke's got your back.

slaughterer's picture

We are at the beginning of a major QE.  Who want to worry about shorting?

Jacque Itch's picture

Buy Buh Bye, Bitchez

yogibear's picture

The more of of the decline the more spending and deficit increases by Obama.

In turn Benny Bernanke prints and buys US debt.

Infinite spending, debt and printing!!!

Look at Japoan and it's the future of the US.


Winston Churchill's picture

Not going to happen.

The dollar is being dumped faster tha a hot curry.

Its only the house of Saud holding it together at this point.Looking at their

current problems, they could fall very quickly.

mayhem_korner's picture



I'm shocked that all the lies are being reconciled just after the inaugural!

Sudden Debt's picture

After New Year and after Valentine, you'll always see the most request for devorces.

If you have to pick a moment to announce the bad news, you pick it after the party and last booty call!!

mayhem_korner's picture



Your avatar looks like its pullin a booty call as we speak...

ouch...brutal afterimage, there

Everybodys All American's picture

Obama thinks we are right on track. Makes you wonder what track.

francis_sawyer's picture

Obama IS on track... BCuz he in President...

Inthemix96's picture

Parasites surviving on the host spring to mind here.

Now the host is in the advanced stage of cancer, or even worser Ebola, and now the parasite is consuming itself.

Fuckers, not gonna be happy till we all live in mud huts.

forwardho's picture

In the end I think they might want quite a few of those huts empty.

6.5 billion is  such an inconvenient number.

dwdollar's picture

Don't worry! More future promises will surely fix everything!!!

Sudden Debt's picture


francis_sawyer's picture

Just use GREEN ink when you print RED numbers... [most won't know the difference]...

rguptatx's picture

Isn't this bullish? Or, at least, baked-in already?

Sudden Debt's picture

if you're talking about gold and silver... YES IT IS!!!!

mayhem_korner's picture

From the shills at Reuters:


U.S. home resales unexpectedly fell in December as fewer people put their properties on the market, although not by enough to derail the boost housing will likely provide to the economy this year.

Desperation has a distinctive smell, and Reuters wreaks of it like a stoner coming off a long weekend on the choom wagon...

kridkrid's picture

That is remarkable. Soak that crap in and then call me a "conspiracy theorist".

I need more cowbell's picture

Things we are FED: bullshit; lies; false hopes; cooked data; raw sewage; aw you know preachin' to the choir agin.