Bidenflation: Richmond Fed Manufacturing Index Crashes While Prices Hit Record High

President Joe Biden speaks about the evacuation of American citizens, their families, SIV applicants and vulnerable Afghans in the East Room of the White House, Friday, Aug. 20, 2021, in Washington. Vice President Kamala Harris listens at left. (AP Photo/Manuel Balce Ceneta)
AP Photo/Manuel Balce Ceneta

Manufacturing activity across the central Atlantic region of the U.S. skidded in August, even while inflationary pressures rose to a record high, data from the Federal Reserve Bank of Richmond showed Tuesday.

The Fifth District Survey of Manufacturing Activity’s composite index unexpectedly dropped to nine in August from 27 in July. That’s the lowest reading since June of 2020, when the economy was staggering from the first wave of the pandemic. Economists had expected a reading of 25, according to Econoday.

Nearly all of the components measuring business sector activity fell in August, including new orders, shipments, and capacity utilization. Several manufacturers reported deeriorating local business conditions and the index for this turned negative.

The gauge of prices received rose to a record high in August and the prices paid metric slipped slightly but remained near the historic high reading hit in July.

Inflation expectations also remain high, with both expected prices received and prices paid rising to new record highs in August.

The wages and average workweek measures both rose. Employers struggled with finding workers with the right skills and said they expected the shortage of workers to continue.

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