| Actual | Previous | |
|---|---|---|
| Level | -7 | -4 |
Highlights
Kansas City Fed district manufacturing activity saw modest contraction again in March as the Kansas City Fed composite index of current conditions came in at minus 7 in March versus minus 4 in February and minus 9 in January.
The index of six-month expectations for business conditions remained marginally positive at 1 in March versus 2 in February and 11 in January.
The current new orders index rather ominously dropped to minus 17 in March from minus 2 in February and minus 19 in January. Production fell to minus 9 from 3 in February and minus 17 in January. The number of employees index came in at 6 in March versus 8 in February and minus 2 in January.
Prices paid registered 17 in March versus 15 in February and 24 in January. Prices received were at 5 in March versus minus 2 in February and 7 in January. So, prices received ended their brief and unusual foray into deflationary territory.
The index of six-month expectations for business conditions remained marginally positive at 1 in March versus 2 in February and 11 in January.
The current new orders index rather ominously dropped to minus 17 in March from minus 2 in February and minus 19 in January. Production fell to minus 9 from 3 in February and minus 17 in January. The number of employees index came in at 6 in March versus 8 in February and minus 2 in January.
Prices paid registered 17 in March versus 15 in February and 24 in January. Prices received were at 5 in March versus minus 2 in February and 7 in January. So, prices received ended their brief and unusual foray into deflationary territory.
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.
