The Richmond Fed Fifth District Manufacturing Index declined to -17 in September (from -7 in August), signaling a sharper contraction in activity across shipments, orders, and employment.

• Shipments fell to -20 (from -5), and new orders dropped to -15 (from -6), pointing to weaker demand conditions.

• Backlogs worsened to -21 (from -12), while capacity utilization decreased to -18 (from -14), suggesting continued slack in operations.

• Employment declined to -15 (from -11), even as wages remained elevated at 13 (though down from 22 in August), reflecting labor cost pressures alongside reduced hiring.

• Local business conditions weakened to -12 (from 0), though expectations for six months ahead improved modestly to -1 (from -10).

• Vendor lead times were steady at 10 (from 11), showing little change in supply chain pressures.

• Prices paid held at 7.22% (from 7.24%), while prices received increased to 4.02% (from 3.14%), indicating input costs remain high but firms are regaining some pricing power.

• Expectations showed softer outlooks for shipments (0 from 13), new orders (8 from 9), and employment (1 from 3), but price growth expectations remained firm, with prices paid at 6.47% and prices received at 4.74%.