Kansas City Fed manufacturing activity remained barely contractionary in January with the composite index at minus 1 versus a revised minus 4 in December. The indexes reflect annual benchmark revisions: the previously reported December figure was minus 9. Separately, the index of six-month expectations for business conditions came in at 3 in January versus a revised 6 in December.

For current conditions, the new orders index came in at minus 8 in January versus minus 15 in December. Production was at minus 4 in January versus minus 6 in December. Prices paid rose to 20 from 18. Prices received were at 16 in January vs. 15 in December. The number of employees index was flat at 4 in January and December.

The Kansas City Fed index offers a monthly assessment of change in the region's manufacturing sector. Positive readings indicate monthly growth and negative readings monthly contraction. Readings at zero indicate no change. The headline number is the composite index, an average of the production, new orders, employment, delivery time, and raw materials inventory indexes.

Investors track economic data like the Kansas City Survey of Manufacturers to understand the economic backdrop for the various markets. The stock market likes to see healthy economic growth because that translates to higher corporate profits. The bond market prefers a moderate growth environment that will not generate inflationary pressures. The survey gives a detailed look at Tenth District's manufacturing sector, how busy it is and where it is headed. Some of the survey indexes also provide insight on inflation pressures—including prices paid, prices received, wages & benefits, and capacity utilization. The equity market is also sensitive to this report because it is an early clue on the nation's manufacturing sector, reported in advance of the ISM manufacturing index and often in advance of the NAPM-Chicago index.