Kansas City Fed district manufacturing activity is off to a drab start in the new year with January showing contraction at the same pace as in December and little changed from November. At least the six-month outlook remained positive.

The Kansas City Fed composite index of current business conditions is at minus 5 in January versus a revised minus 5 in December and revised minus 4 in November. The 2024 indexes reflect an annual revision.

The composite index of six-month expectations for business conditions registers 15 in January versus 17 in December and 10 in November.

The current new orders index is at minus 6 in January versus minus 16 in December and minus 10 in November. Production is minus 6 in January versus minus 9 in December and minus 5 in November.

The number of employees index is 1 in January, 0 in December and -2 in November.

Prices paid registered comes in at 18 in January, 18 in December and 8 in November. Prices received are at 14 in January, 8 in December versus 6 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.