Kansas City Fed manufacturing activity contracted more rapidly in January versus December as the KC Fed composite index of current conditions declined to minus 9 in January from minus 1 in December and minus 2 in November.

The index of six-month expectations for business conditions rose again to 11 in January from 5 in December and minus 1 in November.

The current new orders index registered minus 19 in January from minus 8 in December and 0 in November. Production was at minus 17 in January, minus 4 in December, and minus 3 in November.

Prices paid came in at 24 in January versus 9 in December and 7 in November. Prices received were at 7 in January versus 3 in December and minus 3 in November. The number of employees index was at minus 2 in January, 8 in December, and minus 3 in November.

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.