Richmond Manufacturing Index

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.

BREAKING DOWN '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 Of Richmond

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

    An index based on surveys of more than 300 manufacturing firms ...
  3. Composite

    A grouping of equities, indexes or other factors combined in ...
  4. The National Association Of Purchasing ...

    A monthly index of U.S. manufacturing compiled by the Institute ...
  5. Atlanta Fed Index

    A monthly survey of manufacturing firms located in the southeastern ...
  6. NY Empire State Index

    A seasonally adjusted index that tracks the results of the Empire ...
Related Articles
  1. Markets

    Does the Empire State Index Signal a Recession?

    This morning, the New York Federal Reserve Bank reported the worst numbers in six years for its August 2015 Empire State Manufacturing Survey, indicating not only a potential economic slowdown ...
  2. ETFs & Mutual Funds

    What is an Index?

    An index is a statistical means of calculating a change in an economy or market.
  3. ETFs & Mutual Funds

    The Pros and Cons of Indexes

    Learn about the advantages and disadvantages of stock indexes and passive index funds. Discover how there is an opportunity cost to using index funds.
  4. Markets

    Manufacturing Is Suffering, Consumers Don't Care

    The recent divergence between consumer sentiment and the manufacturing sector's health has continued, with a flurry of data releases Thursday highlighting this rift in the American economy.
  5. Markets

    Using Index Futures To Predict The Future

    Want to know whether the stock market will open up or down? Check out the index futures.
  6. Markets

    Understanding Capitalization-Weighted Indexes

    A capitalization-weighted index is a market index whose individual components are weighted according to their market capitalization.
  7. ETFs & Mutual Funds

    An Introduction To Stock Market Indexes

    Investopedia explains the five most talked about indexes and what makes them all different.
  8. Markets

    Regional Banks Give The Fed A National Perspective

    We all know that the Federal Reserve utilizes monetary policy to control the economy, but what do the 12 regional Federal Reserve Banks do?
  9. Investing

    What's a Market Index?

    A market index combines several stocks to create one aggregate value that’s used to measure a market’s or sector’s performance.
  10. ETFs & Mutual Funds

    ETF Tracking Errors: Protect Your Returns

    Tracking errors tend to be small, but they can still adversely affect your returns. Learn how to protect against them.
RELATED FAQS
  1. Is it possible to invest in an index?

    First, let's review the definition of an index. An index is essentially an imaginary portfolio of securities representing ... Read Answer >>
  2. What are the most common market indicators to follow the Chinese stock market and ...

    Learn the most commonly followed market and economic indicators used by market analysts to track the Chinese stock market ... Read Answer >>
  3. Who determines the reserve ratio?

    Understand what the Federal Reserve is and what it regulates in the U.S. economy. Learn about the reserve ratio and how the ... Read Answer >>
  4. Which benchmarks / indexes track the automotive sector?

    Explore some of the major benchmark equity indexes worldwide that analysts and investors use to track the performance of ... Read Answer >>
  5. Why would the Federal Reserve change the reserve ratio?

    Understand the Federal Reserve's monetary policy and the tools it uses to change that monetary policy. Learn about the reserve ... Read Answer >>
  6. What are the pros and cons of using the S&P 500 as a benchmark?

    Learn about the advantages and disadvantages of using the S&P 500 as a benchmark for portfolio performance, and understand ... Read Answer >>
Hot Definitions
  1. Put Option

    An option contract giving the owner the right, but not the obligation, to sell a specified amount of an underlying security ...
  2. Frexit

    Frexit – short for "French exit" – is a French spinoff of the term Brexit, which emerged when the United Kingdom voted to ...
  3. AAA

    The highest possible rating assigned to the bonds of an issuer by credit rating agencies. An issuer that is rated AAA has ...
  4. GBP

    The abbreviation for the British pound sterling, the official currency of the United Kingdom, the British Overseas Territories ...
  5. Diversification

    A risk management technique that mixes a wide variety of investments within a portfolio. The rationale behind this technique ...
  6. European Union - EU

    A group of European countries that participates in the world economy as one economic unit and operates under one official ...
Trading Center