The Richmond Federal Reserve had some good news for us today: Its survey of industrial activity in November registered a 13. Now most folks might consider 13 to be an unlucky number, but in a month when most economists had expected the survey to score four, up from a score of one in October, 13 looks pretty good. So when you hear the news that the Richmond Federal Reserve rated the economy a 13, you probably have a couple of questions:
1. What? There’s a Federal Reserve bank in Richmond?
To most of us, the Federal Reserve is the nation’s central bank, and we really only pay attention to it when it’s pumping oodles of cash into our banking system, or fiddling with interest rates. But the Fed is more than just the house of Greenspan/Bernanke/Yellen. It’s a network of 12 regional Federal Reserve Banks, located around the country, each of which has its own chair, its own area of responsibility, and tracks economic progress in its region. So while the quarterly announcements from the big ol’ Fed give us a view on how the entire U.S. economy is doing, data from the regional Feds, of which Richmond is one, give us a much more focused view of how the economy is doing in certain areas.
2. So what does 13 mean?
Every month, the Richmond Fed surveys industry in Virginia, the Carolinas, Maryland, Washington, D.C. and West Virginia. It plugs all of that data into its abacus and comes up with an index. It’s a lot like the Dow Jones Industrial Average – a weighted average of data. So when you hear the Richmond Fed’s survey increased to 13, that’s a bit like hearing the Dow reached 16,000.
And given where we are in our economic recovery right now, 13 is a great number. So let’s consider ourselves lucky.
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