The Richmond Fed survey on manufacturing for September didn’t completely satisfy our high expectations. Indeed, while the headline index stabilized at 14 for the third month in a row, not a bad outcome; the details were more mixed, just as was the case in the Philly Fed survey released last week. New orders slipped to 13 from 18 in August and 24 in July, order backlogs fell into negative territory (-5 from +4) and so did vendor performance (-3 from 2). Shipments stabilized at a solid 22. On the positive side, the employment index rose to 5 from 0, the first positive reading for this index since the recovery began and the average workweek printed a strong result of 15, little changed from previous months. So, overall, not yet a report to get worried about, but one expects from the manufacturing sector to post ongoing strong and strengthening readings in the first phase of the recovery. Together with the results of the Philly Fed survey, it might be that the ISM index slid slightly lower when it is reported early October.
House prices (FHFA) rose by 0.3% M/M in July, following a sharp downwardly revised 0.1% M/M increase in June, earlier reported as +0.5% M/M. On a yearly basis, prices are still down 4.2%, up from -5.3% in June. It seems that house prices are very gradually turning in the right direction, but don’t expect a too steep improvement anytime soon.
