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Economy in Brief
FIBER: Industrial Commodity Prices Improve Modestly
The FIBER Industrial Materials Price Index increased 0.9% during the four weeks ended April 9...
EMU Retail Sales Jump, Regaining Some of the January Drop
February finds EU retail sales and motor vehicle registration rebounding...
U.S. PPI Posts Broad-Based Strength in March
The Producer Price Index for final demand jumped 1.0% (4.2% y/y) during March...
U.S. Wholesale Inventories Post Strong February Gain; Sales Fall
Wholesale inventories increased 0.6% (2.0% y/y) during February...
U.S. Initial Unemployment Insurance Claims Unexpectedly Increase
Initial claims for unemployment insurance rose to 744,000 during the week ended April 3...
Viewpoints
Commentaries are the opinions of the author and do not reflect the views of Haver Analytics.
Monetary Policy Blunder: Not Managing Economic & Financial Outcomes Equally
Monetary Policy at a Crossroad: Policymakers Need to Break Promise of Easy Money to Avoid Boom-Bust
State Coincident Indexes in January
Data Surprises, Markets and COVID
by Tom Moeller April 25, 2019
The Federal Reserve Bank of Kansas City indicated that its index of regional manufacturing sector business activity declined to five in April from 10 in March. It remained down versus the high of 26 reached last May.
The ISM-Adjusted index fell to 53.5 (NSA) this month from 56.4 and remained lower than its high of 64.2 reached in May 2018. Since 2008, there has been a 56% correlation between this index and the q/q change in real GDP.
The shipments, production, supplier delivery times and order backlog readings deteriorated m/m, and were down significantly from the highs of early last year. The new orders series improved, however, to the highest level since November. The export order index also surged to the highest level since May of last year.
The employment reading fell and remained sharply below the high reached nine months earlier. A greatly weakened 19 percent (NSA) of respondents reported increased hiring while a higher 17 percent reported a decline in job levels. The employee workweek index stabilized after a sharp recovery in March.
The index of finished goods prices improved slightly after falling earlier to the lowest level since Q3'17. A slightly higher 19% of respondents paid higher prices, while a steady six percent paid less. The raw materials prices index was unchanged at the lowest level since October 2016.
The overall expectations index weakened to 11, the lowest level since September 2016. It remained down sharply from its February 2018 high of 36. Declines spread throughout the component series. The expected shipments, new orders and employee workweek readings were notably weak. Expected production fell to a nearly three-year low. The expected capital expenditure figure remained well below its high twelve months earlier.
The expected finished goods price index eased m/m and has been moving sideways for six months, well below the highs twelve months earlier. The expected raw materials price figure has shown similar movement.
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) | Apr | Mar | Feb | Apr '18 | 2018 | 2017 | 2016 |
---|---|---|---|---|---|---|---|
Conditions Versus One Month Ago (% Balance) | 5 | 10 | 1 | 24 | 18 | 14 | -2 |
ISM-Adjusted Composite Index (NSA) | 53.5 | 56.4 | 48.5 | 63.8 | 58.9 | 56.7 | 48.5 |
New Orders Volume | 10 | 4 | -10 | 32 | 17 | 17 | -2 |
Number of Employees | 2 | 14 | 10 | 24 | 17 | 15 | -6 |
Production | 12 | 17 | -4 | 29 | 18 | 17 | 0 |
Prices Received for Finished Product | 10 | 7 | 18 | 27 | 22 | 7 | -7 |
Expected Conditions in Six Months | 11 | 22 | 13 | 31 | 28 | 26 | 9 |
New Orders Volume | 12 | 29 | 13 | 33 | 35 | 35 | 19 |
Number of Employees | 19 | 34 | 28 | 35 | 33 | 31 | 8 |
Production | 14 | 28 | 18 | 44 | 40 | 40 | 20 |
Prices Received for Finished Product | 35 | 39 | 34 | 50 | 42 | 27 | 7 |