| Actual | Previous | |
|---|---|---|
| Level | -4 | -9 |
Highlights
Kansas City Fed district manufacturing activity contracted more slowly in February compared with January as the KC Fed composite index of current conditions came in at minus 4 in February versus minus 9 in January.
The composite index of six-month expectations for business conditions moderated but remained slightly positive at 2 in February versus 11 in January.
The current new orders index registered minus 2 in February compared with a gloomier minus 19 in January. Production improved to expansion at 3 in February from minus 17 in January. The number of employees index rose to 8 in February from minus 2 in January.
Prices paid eased to 15 in February from 24 in January. Prices received actually edged down with a reading of minus 2 in February versus 7 in January. The decline suggests manufacturers are seeing diminished pricing power, good news for Federal Reserve officials who are hoping the inflation spell has broken.
The composite index of six-month expectations for business conditions moderated but remained slightly positive at 2 in February versus 11 in January.
The current new orders index registered minus 2 in February compared with a gloomier minus 19 in January. Production improved to expansion at 3 in February from minus 17 in January. The number of employees index rose to 8 in February from minus 2 in January.
Prices paid eased to 15 in February from 24 in January. Prices received actually edged down with a reading of minus 2 in February versus 7 in January. The decline suggests manufacturers are seeing diminished pricing power, good news for Federal Reserve officials who are hoping the inflation spell has broken.
Definition
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.
Description
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.
