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. The National Association Of Purchasing ...

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

    A monthly survey of manufacturing firms located in the southeastern ...
  4. APICS Business Outlook Index

    A national manufacturing index that surveys several manufacturing ...
  5. Weighted Average Market Capitalization

    A stock market index weighted by the market capitalization of ...
  6. Composite

    A grouping of equities, indexes or other factors combined in ...
Related Articles
  1. Investing Basics

    What is an Index?

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

    Index Investing: What Is An Index?

    An index is a statistical measure of the changes in a portfolio of stocks representing a portion of the overall market. It would be too difficult to track every single security trading in the ...
  3. Economics

    The Importance Of The Purchasing Managers' Index (PMI)

    The PMI is the headline indicator in the ISM Manufacturing Report on Business, an influential monthly survey of purchasing and supply executives across the United States. The acronym PMI stood ...
  4. Options & Futures

    Using Index Futures To Predict The Future

    Want to know whether the stock market will open up or down? Check out the index futures.
  5. Mutual Funds & ETFs

    Index Investing: Other Indexes

    We've covered most of the big U.S. indexes, but we've barely scratched the surface of all the other indexes in the world. There are literally thousands of indexes tracking nearly any market. ...
  6. Investing Basics

    An Introduction To Stock Market Indexes

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

    Understanding Capitalization-Weighted Indexes

    A capitalization-weighted index is a market index whose individual components are weighted according to their market capitalization.
  8. Economics

    The ABCs Of Stock Indexes

    Indexes can track market trends, but they're not always reliable. Can you trust them?
  9. Economics

    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?
  10. Markets

    Conference Board: Composite Index Of Leading Indicators

    By Chris Stone Contact Chris The purpose of the Board's Business Cycle Indicators (BCI) is to provide ways for analyzing the expansions and contractions of the economic cycle. The Composite ...
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. 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 >>
  4. What is the structure of the U.S. Federal Reserve Bank?

    Wonder how the U.S. Federal Bank began and how it works today? Learn how this complex system is structured and how it works ... Read Answer >>
  5. What are the most common market indicators to follow the U.S stock market and economy?

    Understand some of the key indicators analysts use to follow the U.S. stock markets and to assess the overall condition of ... Read Answer >>
  6. What happens if the Federal Reserve lowers the reserve ratio?

    Learn about the Federal Reserve's monetary policy and the tools it uses to control it. Understand what happens if the Federal ... Read Answer >>
Hot Definitions
  1. Over-The-Counter - OTC

    Over-The-Counter (or OTC) is a security traded in some context other than on a formal exchange such as the NYSE, TSX, AMEX, ...
  2. Quarter - Q1, Q2, Q3, Q4

    A three-month period on a financial calendar that acts as a basis for the reporting of earnings and the paying of dividends.
  3. Weighted Average Cost Of Capital - WACC

    Weighted average cost of capital (WACC) is a calculation of a firm's cost of capital in which each category of capital is ...
  4. Basis Point (BPS)

    A unit that is equal to 1/100th of 1%, and is used to denote the change in a financial instrument. The basis point is commonly ...
  5. Sharing Economy

    An economic model in which individuals are able to borrow or rent assets owned by someone else.
  6. Unlevered Beta

    A type of metric that compares the risk of an unlevered company to the risk of the market. The unlevered beta is the beta ...
Trading Center