Richmond Fed Manufacturing Index declines, with both orders and employment components cooling down

⑴ The Richmond Fed's June Manufacturing Composite Index fell from 13 in May to 4, and the three-month moving average declined to 7, indicating that manufacturing expansion momentum in the Fifth Federal Reserve District of the United States has slowed significantly compared to last month, but still remains in expansion territory. ⑵ Among sub-indices, shipments plunged from 16 to 3, new orders retreated from 17 to 9, the number of employees turned negative from 3 to -1, and capacity utilization remained at -1. The synchronous weakening of the three core components indicates that production momentum is diminishing. ⑶ The annualized increase in prices paid rose from 5.96% in May to 6.99%, while the increase in prices received only edged up slightly from 4.21% to 4.57%. The rate of input cost growth is clearly outpacing output prices, and corporate profit margins are facing further pressure. ⑷ Both the finished goods and raw materials inventory indices rose from 4 and 5 in May to 9, with inventory accumulation speeding up. Combined with the decline in new orders and a negative shift in employment, this suggests manufacturers are becoming more cautious about demand prospects, and the willingness to restock may turn conservative.