Richmond Manufacturing Index

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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. Diffusion Index

    1. A measure of the percentage of stocks that have advanced in ...
  6. Leading Indicator

    A measurable economic factor that changes before the economy ...
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