Manufacturing Slows in Mid-Atlantic, Outlook Improves

- The Richmond Fed Index for December fell to -2 versus estimates of 10 and a reading of 9 in November.

BOTTOM LINE: Manufacturing activity in the Central Atlantic region edged lower in December, Bloomberg reported. The shipments component of the index fell to 1 from 14. The new orders component fell to -2 from 10 and a gauge of manufacturing employment in the region fell to -6 from 0. However, measures of confidence improved as the expected shipments component rose 21 points to 50. The expected new orders component of the index rose 20 to 43. The index for expected manufacturing employment rose 11 points to 10. Finally, the planned capital expenditures component rose 6 points to 18. I continue to believe manufacturing will add to US economic growth over the intermediate-term as businesses increase spending, inventories are rebuilt and hurricane rebuilding accelerates.