Richmond Manufacturing Index

AAA

DEFINITION of 'Richmond Manufacturing Index'

A gauge of broad activity in the manufacturing sector located in the Fifth Federal Reserve District, published by the Federal Reserve Bank of Richmond. The index is a composite index that represents a weighted average of the shipments, new orders and employment indexes. Each index is a diffusion index, i.e. it is equal to the percentage of responding firms reporting increases minus the percentage reporting decreases, with results based on responses from 80 out of 110 firms surveyed.

INVESTOPEDIA EXPLAINS 'Richmond Manufacturing Index'

Traders consider the Richmond Manufacturing Index of some importance because it is released close to month-end and may offer some clues on what the influential Institute for Supply Management (ISM) national manufacturing report - released at the beginning of the month - may hold. The price trends data in the index is also watched to get an early read on potential inflation.

RELATED TERMS
  1. Federal Reserve Bank

    The central bank of the United States and the most powerful financial ...
  2. Federal Reserve Bank Of Richmond

    The Federal Reserve bank located in Richmond, Va.; it is responsible ...
  3. ISM Manufacturing Index

    An index based on surveys of more than 300 manufacturing firms ...
  4. ISM Non-Manufacturing Index

    An index based on surveys of more than 400 non-manufacturing ...
  5. Leading Indicator

    A measurable economic factor that changes before the economy ...
  6. Diffusion Index

    1. A measure of the percentage of stocks that have advanced in ...
RELATED FAQS
  1. How do open market operations affect the money supply of an economy?

    The open market operations conducted by the Federal Reserve affect the money supply of an economy through the buying and ... Read Full Answer >>
  2. What does it mean when I get a Fed margin call?

    Understanding fed margin calls and how they affect your trading account is part of investing basics. A margin account allows ... Read Full Answer >>
  3. What are the different types of margin calls?

    Margin is much like buying stocks on loan. An investor borrows funds from a brokerage firm to purchase stocks and pays interest ... Read Full Answer >>
  4. What are some examples of operations management in healthcare?

    Open market operations are a mechanism by which monetary policy is transmitted. Monetary policy aims to find the best balance ... Read Full Answer >>
  5. What economic indicators are important to consider when investing in the banking ...

    The banking sector is a hinge for nearly all economic activity. For that reason, there's hardly an economic indicator that ... Read Full Answer >>
  6. What factors are the primary drivers of banks' share prices?

    In a broad sense, bank share prices are driven by the same forces as any other shares. Major, abstract factors include overall ... Read Full Answer >>
Related Articles
  1. Fundamental Analysis

    Vital Link: Manufacturing And Economic Recovery

    Manufacturing output is one of the clearest signs that an economy is recovering from a recession.
  2. Economics

    What is an Economic Dove?

    Dove is an economic term describing an economic monetary adviser who favors keeping interest rates low because it stimulates the economy.
  3. Investing

    What A Rate Hike May Mean For Stocks

    By the end of the year, investors will likely be contending with the first Federal Reserve (Fed) rate hike in nearly a decade.
  4. Professionals

    Why You Should Avoid Fixating on Bond Duration

    Financial advisors and their clients should then focus on a bond fund’s portfolio rather than relying on any single metric like duration.
  5. Credit & Loans

    How The Federal Reserve Affects Mortgage Rates

    The Federal Reserve's actions as it aims to maintain economic stability impact the cost of funds for banks and consequently for mortgage borrowers.
  6. Economics

    Will The US Economy Rebound In The 2nd Quarter?

    Most investors know that U.S. 1st quarter growth numbers aren’t pretty. Economic statistics have been missing expectations by the largest margin since 2009
  7. Economics

    The U.S. Economy May Be Stronger Than You Think

    While the economic performance in the U.S. broadly disappointed in the first quarter, temporary factors presented one-off events that depressed output.
  8. Investing

    Pockets Of Value In The Stock Market

    U.S. stocks benefited from signs the Fed’s path toward higher interest rates, as well as from continued merger-and-acquisition activity on of low rates.
  9. Economics

    Why Is The Federal Reserve Independent?

    An overview of the independent status of the Federal Reserve and arguments for and against it.
  10. Investing

    The Implications Of Negative Interest Rates

    If financial theory is grounded in one principal, it would be the that individuals prefer consumption today over consumption in the more uncertain future.

You May Also Like

Hot Definitions
  1. Fracking

    A slang term for hydraulic fracturing. Fracking refers to the procedure of creating fractures in rocks and rock formations ...
  2. Mixed Economic System

    An economic system that features characteristics of both capitalism and socialism.
  3. Net Worth

    The amount by which assets exceed liabilities. Net worth is a concept applicable to individuals and businesses as a key measure ...
  4. Stop-Loss Order

    An order placed with a broker to sell a security when it reaches a certain price. A stop-loss order is designed to limit ...
  5. Covered Call

    An options strategy whereby an investor holds a long position in an asset and writes (sells) call options on that same asset ...
  6. Butterfly Spread

    A neutral option strategy combining bull and bear spreads. Butterfly spreads use four option contracts with the same expiration ...
Trading Center