U.S. Economic Slowdown: Richmond Fed Index Plunges 13 Points, New Orders Hit Historic Low

The recent economic indicators from the United States have shown a continued decline in "soft" data, with the Richmond Federal Reserve's manufacturing new orders expectations hitting an all-time low. The Philadelphia Federal Reserve's non-manufacturing survey index plummeted to -42.7 in April, down from -32.5 the previous month. Both current conditions and six-month expectations have fallen to their lowest levels since the peak of the COVID-19 lockdowns.

The Richmond Federal Reserve's manufacturing activity survey for April revealed an even more dire situation, with the index plunging to -13, well below the expected -7 and the previous value of -4. Overall business conditions dropped to -30, nearing the lowest levels seen during the COVID-19 lockdowns. New orders expectations hit a historic low, even worse than during the peak of global supply chain disruptions caused by the pandemic. Meanwhile, payment prices surged.

Ask Aime: How do the latest economic indicators from the United States and the Federal Reserve affect the overall market and consumer confidence?

These developments indicate a significant slowdown in the U.S. economy, with businesses adopting a defensive stance and delaying investments due to concerns over consumer spending. The Richmond Federal Reserve Chairman noted that inflation expectations may have eased, but there are still many reasons to worry about consumer expenditure.

The continued decline in "soft" data raises questions about the future trajectory of the U.S. economy. Will we see a repeat of the second quarter of 2024, where "hard" data follows the downward trend of "soft" data, or will the second quarter of 2023 be replicated, with "hard" data remaining strong despite the emotional downturn in "soft" data? Only time will tell as the economic landscape continues to evolve.