Inflationary pressures continue to run at near-record highs in the central Atlantic region of the U.S. in June, data from a survey from the Federal Reserve Bank of Richmond showed Tuesday.
The Fifth District Survey of Manufacturing Activity’s gauge of prices paid by manufacturers showed prices rising at an annualized rate of 9.42 percent, more than 450 percent of the long-term average. That is the second-highest rate recorded in data going back to 1997, just below the 9.81 percent recorded in May.
Manufacturers said they have been able to hike the prices of their own goods at an annualized rate of five percent in June, which is five times the long-term average. That too is the second-highest rate recorded after May’s 5.41 percent price gain.
The data comes from the Richmond Fed’s survey of manufacturing firms across the Fifth Federal Reserve District, which encompasses the District of Columbia, Maryland, North Carolina, South Carolina, Virginia and most of West Virginia.
Expectations for rising prices and costs in the future also remain just below the record highs set in May. Manufacturers say they expect prices paid to rise at an annualized rate of 5.19 six months from now. They expect to be able to raise the prices of their goods at an annualized rate of 4.8 percent.
Surveys by the New York Fed and Philadelphia Fed released last week also showed powerful forces of inflation at work. The “Empire State” survey showed a record number of firms saying they had seen increases in prices paid and prices received. The Philadelphia Fed’s survey, which is the longest running of the regional Fed manufacturing surveys, indicated the most inflation since 1979.
Manufacturers indicated that many increased employment and wages in June, albeit at a slower pace than in May, and expected further increases in the next six months. Factories struggled to find workers with the necessary skills, a difficulty that manufacturers expect to continue this year.
The composite index rose to 22 in June, up from 18 in May, indicating ongoing expansion. The reading beats the forecasts from economists polled by Econoday, who expected the indicator to stand at 18.
The gain in the composite index was driven by an increase in the new orders index, while the other two component indexes — shipments and employment — also remained in expansionary territory, the Richmond Fed said. Manufacturers continued to report shrinking inventories, growing order backlogs, and lengthening vendor lead times.