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With the shutdown of almost all economic statistics from the federal government, one of the most important remaining sources is the Fed and its regional banks. All 5 of them that publish manufacturing and services reports have now done so. Which means that we have a decent placeholder proxy for important trends in order, production, prices, and employment.

Today I am going to focus on the manufacturing reports. The chart below includes, in order, NY, Philadelphia, Richmond, Kansas City, and Texas. Month-over-month changes are in parentheses, with the absolute values for October following. The final number is the average change and absolute number for all 5 together.
 

Regional Fed:     NY.           PHL.           RVA.       KC.    TX.    Avg

Headline:     (19.4) 10.7; (-36.0) -12.8; (13) -4; (2) 6; (0) 5.2; (14) 3.5          

New Orders (23.3) 3.7; (5.8) 18.2; (9) -6; (-1) 1; (0.9) -1.7; (7.6) 3.0 

Prices Paid  (6.3) 52.4; (2.4) 49.2; (-1.4) 5.8; (1) 41; (-10.0) 33.4; (-0.3) 29.0 

Prices Rec’d (5.6) 27.2; (8.0) 26.8; (-1.0) 3.0; (6) 19; (-4.0) 7.7; (2.9) 16.7

Wages* (n/a) n/a; (n/a) n/a; (2) 15; (n/a) n/a; (-1.7) 14.2); (0.2) 14.6

Employment  (7.4) 6.2; (-1.0) 4.6; (5) -10; (-6) 1; (5.4) 2.0; (2.2) 0.8

____

* only 2 of the banks report this information
 

While the chart is somewhat messy, below are the 3 main trends:

 1. Production and, to a lesser extent, new orders showed significant upward momentum in October, while prices, wages, and employment showed little change.

 2. But if upward momentum (2nd derivative) has abated, prices both received by the manufacturers, and even more impressively, prices paid by them for raw materials increased sharply, indicating continued effects from tariffs and trade issues, some of which, but only some of which, are being passed on to retailers and consumers.

 3. Wages show continued strong growth, but employment is virtually dead in the water, neither expanding nor contracting.

Importantly, remember that the goods-producing sector is only roughly 1/4 of the entire US economy. The remaining 3/4’s is picked up by the services surveys.

But because production and orders are significantly positive, this means the goods-producing sector of the economy was growing this month, while inflation is an increasingly important issue (which *should* greatly complicate matters for the Fed), and employment is almost not picking up at all.

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