POWER: EdF Halts Penly 2 Reactor 24-25 May

The Richmond Fed's Fifth District Survey of Service Sector Activity meanwhile showed the weakest composite reading (-30.0, -14.0 prior) since July 2022 and before that, April/May 2020. The 6-month outlook likewise fell to -29.0 (-5.0 prior), effectively meaning the two series have converged at multi-year lows.

• This was a soft report across the board, with the indices for revenues and demand, as well as their respective expectations indices, falling in the month.
• The employment index remained positive but the forward-looking index fell sharply (to 1 from 12), with both current and future wage indices decelerating but still very much in positive territory.
• The prices portion of the survey showed an interesting divergence: prices received actually fell in the month to the lowest since April 2021 at 3.0%, while prices paid were fairly steady at 4.9%. Looking ahead, expected prices received likewise was steady at one-year highs of 4.2%, but expected prices paid rose to 5.9% from 5.1%, highest since January 2023.
• Evidently, price pressures had been dissipating for regional service firms coming into April, but firms were concerned that inflation in future receipts would not keep pace with input price rises.

The Richmond Fed released two surveys for the Fifth District that were consistent with recessionary conditions, with both the manufacturing and services sectors showing signs of significant weakness in April amid rising price pressures. The surveys, which mirror deteriorations in other regional Fed indices for April amid tariffs impacting, cover a region encompassing Washington D.C., Maryland, North Carolina, South Carolina, Virginia, and most of West Virginia.

• Starting with manufacturing, the Fifth District index fell to -13 in April from -4 prior (and worse -7 survey), representing a 5-month low. The three indices that make up that composite - shipments, new orders, and employment - each fell further.
• In the biggest warning sign, expectations for local business conditions continued to collapse: at -37.0 from -22.0 prior and positive 40.0 as recently as December. That marks an all-time low for the survey.
• Indeed most forward-looking indicators were increasingly negative, including for future local business conditions, shipments and new orders.
• And at the same time, inflation expectations soared: expectations for prices paid over the next 12 months rose to 8% (non-seasonally adjusted), an all-time high (going back to at least 2000), with expected prices received up to 6.0% (just below the all-time 7% high). Current (over past 12 months) prices paid/received rose less dramatically but were still very elevated at 23- and 16- month highs, respectively.
• In short, this was a very stagflationary report for regional manufacturing.

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