Recent Updates
- Japan: Japan: CPI, Government Bond Trading Volume by Category of Investors (Apr)
- New Zealand: Overseas Merchandise Trade (Apr)
- UK: Consumer Confidence Barometer (May)
- UK Regional: Regional Consumer Confidence Barometer (May)
- more updates...
Economy in Brief
U.S. Index of Leading Indicators Fell in April
Five of the index's components fell in April, one was unchanged and four increased...
U.S. Unemployment Claims Rose in the Latest Week
The state insured rates of unemployment in regular programs vary widely...
U.S. Housing Starts Dip in April but Remain Elevated
The pattern of housing construction activity seems to be shifting toward multifamily...
U.S. Mortgage Applications Continued to Slide Amid Higher Rates
The biggest declines have been in refinancing activity, while applications for purchase are just starting to crack...
UK Inflation Jumps
Inflation is at the highest rate since the series began in January of 1989...
Viewpoints
Commentaries are the opinions of the author and do not reflect the views of Haver Analytics.
Profits and Margins Plunge In Q1: Expect More Margin Contraction As Fed Squeezes Inflation
The Many Links of Inflation Cycle: Hard Landing Is Needed to Crack Them
Peak Inflation & Fed Policy: A Relationship Which Should Worry The Fed And Scare Investors
Why Have the Yields on TIPS Been Negative in the Past Two Years?
by Tom Moeller October 25, 2018
The Federal Reserve Bank of Kansas City reported that its index of regional manufacturing sector business activity declined to 8 in October, the lowest level since December 2016. It remained down from the May high of 29.
The ISM-Adjusted index improved slightly to 55.7 (NSA) this month from 55.4 but remained down from its April high of 64.2. During the last ten years, there has been a 57% correlation between this index and the q/q change in real GDP.
Movement amongst the index components was mostly negative. Declining sharply were the new orders, production and supplier delivery times indexes, the latter indicating the quickest product delivery speeds since November 2017. The export orders series improved moderately as did the order backlog series, but both remained depressed versus earlier levels.
The employment reading rose slightly following marked weakness during Q3. A slightly higher 28 percent (NSA) of respondents reported increased hiring while a lessened 16 percent reported a decline in job levels. The employee workweek index stabilized after it tumbled in Q3.
The index of finished goods prices weakened to the lowest level since December. A lessened twenty-six percent of respondents paid higher prices, while a steady four percent paid less. The raw materials prices index fell to the lowest level since December.
The overall expectations index declined to 21, the lowest level in 12 months and down sharply from its February high of 38. Expected employment declined sharply as did the expected supplier delivery times index. Expected production and export orders fell m/m. The expected capital expenditure figure plummeted to the lowest level since December 2016.
The expected finished goods price index fell m/m and remained down versus the high six months ago. The expected raw materials price figure has weakened considerably since May 2016.
The diffusion indexes are calculated as the percentage of total respondents reporting increases minus the percentage reporting declines. The survey included 94 responses from plants in Colorado, Kansas, Nebraska, Oklahoma, Wyoming and northern New Mexico. Data for the Kansas City Fed Survey can be found in Haver's SURVEYS database.
Kansas City Federal Reserve Manufacturing Survey (SA) | Oct | Sep | Aug | Oct '17 | 2017 | 2016 | 2015 |
---|---|---|---|---|---|---|---|
Conditions Versus One Month Ago (% Balance) | 8 | 13 | 14 | 22 | 14 | -2 | -5 |
ISM-Adjusted Composite Index (NSA) | 55.7 | 55.4 | 57.0 | 62.2 | 56.7 | 48.5 | 46.8 |
New Orders Volume | 7 | 15 | 9 | 24 | 17 | -1 | -7 |
Number of Employees | 8 | 1 | 14 | 19 | 15 | -6 | -10 |
Production | 5 | 10 | 10 | 18 | 17 | 1 | -5 |
Prices Received for Finished Product | 19 | 24 | 27 | 11 | 7 | -7 | -5 |
Expected Conditions in Six Months | 21 | 27 | 29 | 30 | 26 | 9 | 4 |
New Orders Volume | 41 | 35 | 36 | 47 | 35 | 19 | 11 |
Number of Employees | 15 | 29 | 33 | 33 | 31 | 8 | 6 |
Production | 37 | 38 | 44 | 45 | 41 | 20 | 12 |
Prices Received for Finished Product | 38 | 44 | 28 | 31 | 27 | 7 | 9 |