Richmond Fed Manufacturing Survey Collapses By Most On Record

Tyler Durden's picture

Following flash PMI's drop, another early August indicator has collapsed as Richmond Fed's manufacturing survey plunges to -11 (lowest since Jan 2013) missing expectations of +6. The plunge from July's +10 to August's -11 is the largest on record - back to 1993.

Biggest drop on record...


Weakness was across the board with new orders crashing from +15 to -20, order backlogs and capacity utlization collapsed, and average workweek slumping.

  • Forecast range from 5 to 9 from 10 economists surveyed
  • Shipments fell to -14 after 7 the prior month
  • New order volume slowed to -20 after 15 the prior month
  • Order backlogs fell to -21 after 1 the prior month
  • Capacity utilization slowed to -19 after 3 the prior month
  • Inventory levels of finished goods increased to 24 after 15 last month
  • Inventory levels of raw goods rose to 27 after 23 last month

The only thing stopping this from being a monumental disaster was hope that sent future shipment expectations from +19 to +41 - the highest in a year.

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Dazman's picture

Transitory. Or as we like to say here at the FED, just give us a minute to manipulate that plz.

Government needs you to pay taxes's picture

Speaking of 'transitory', the # of homeless in the large cities coast-to-coast suggests that economic/social conditions continue to deteriorate for a broad swath of America.  Surprisingly given the level of MSM propaganda targeting the theme 'everything is wonderful', this theme has been/continues to be well-documented by the large propaganda mouthpieces, including the New York and LA Times.  Very interestingly, there has been an explosion of older homeless (>50 years old) as well as very young homeless (20-24).  If you give a shit about the nation, this should be a flashing red light type of indicator.

adr's picture

I've seen a major uptick in sad faced "homeless" people standing at busy intersections.

idea_hamster's picture

"When all the other indicators are crashing, mine goes to -11 for that little extra something"

Nunyadambizness's picture

We are in the convergence of "1984" and "Animal Farm"--All is well, the economy is booming, everything is wonderful...soon to be followed by "Work makes you free"

dmger14's picture

I work in DC and can tell you the past year has been bad for numbers of homeless. They accumulate in places over a span of a few months, then are given tents and multiply more, then are cleared out, only to begin accumulating again quickly thereafter.  IDK how much of it is drug related but believe for sure the Obameconomy has contributed heavily to it, given we are in the final year of hope and change.

WOW101's picture

It has to be the weather!

corporatewhore's picture

It doesn't matter--felons get to vote. 

Virginians, you are so f'd.

Government needs you to pay taxes's picture

Rule of law = kaput.  It's all over but the Mad Max ending.  Keep your fields-of-fire clear and one in the chamber.

jamesmmu's picture

So no hike talk this friday, bearish!

Banker Buster's picture

It's working!!! keep doing ZIRP and QE and all will be well.

Citizen_x's picture

2 Virginia....

The Beltway area and everyone else...

praps's picture

May have to delay the hockey stick recovery until 2018.  Definitely coming though.

Sky flyer's picture

To the moon. To the fucking moon I tell you.

south40_dreams's picture

Or it blows up on the pad. One of 'em

adr's picture

I have never seen an inventory backlog like this year. The big retailers aren't placing large orders now but are attempting to get wholesalers to stock up big for the spring season. However they are holding off on giving shipping windows, we haven't shipped a big bulk order in months. The big retailers just don't know how much is going to sell this holiday season and are going to go very sparse this winter. Of course comps will probably blow last year's number out of the water, like buying back shares to goose EPS, holding less inventory makes it easier to sell a higher percentage of it.

The biggest move is to just in time inventory. They ask the wholesaler to hold the inventory and ship on an as need basis. The problem is this severely crushes cash flow for wholesalers and takes all of your warehouse space making it nearly impossible to bring bulk orders of new product in.

Many wholesalers and distributors are just closing up shop because there just isn't enough orders booked to count on enough cash coming in to run their business.

There is a reason the only "successful" corporations today produce absolutely nothing.

Conax's picture

I wondered why they stuffed the DOW up a hundred at the open.

Because everything is Awesome!  <Cue the Weebles>

nightwish's picture

maybe its opposite day

Paul John Smith's picture

This is great news, it means there is plenty of room for more QE.

south40_dreams's picture

I was contra when contra wasn't cool

1980XLS's picture

Enron Musk says New Tesla battery (in $130K Model S) goes over 300 mi per charge now.

No worries. We have all been saved.

$130K cars in every Garage.

LoveTruth's picture

The FED started their own FB page.

Go tell them what kind of job they have done.