Kansas City Fed district manufacturing activity remains in the doldrums as the Kansas City Fed composite index of current conditions slipped to minus 8 in June from minus 2 in May, minus 8 in April, minus 7 in March, and minus 4 in February. Employment dropped into contraction in June.

The composite index of six-month expectations for business conditions ticked up to 7 in June from 6 in May and a marginally positive 2 in April, 1 in March and 2 in February.

The current new orders index came in at minus 13 in June versus minus 13 in May, minus 6 in April, minus 17 in March and minus 2 in February. Production was at minus 11 in June versus minus 1 in May, minus 13 in April, minus 9 in March and 3 in February. The number of employees index was a notable decliner at minus 11 in June versus 9 in May, minus 2 in April, 6 in March and 8 in February.

Prices paid registered 9 in June versus 19 in May, 18 in April, 17 in March and 15 in February. Prices received were at 3 in June versus 7 in May, 0 in April, 5 in March, and minus 2 in February.

In response to a separate special question, the Kansas City Fed said about a quarter of firms stopped posting new positions for workers or reduced hours for their staff in the last three months. It added that only 11 percent of firms plan to reduce hours in the next six months, and 9 percent of firms have laid off workers or plan to lay off workers.

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.