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Economy in Brief
U.S. Initial Unemployment Insurance Claims Rise Just 9,000
Initial claims for unemployment insurance rose modestly by 9,000 to 745,000 in the week ended February 27...
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Revisions to nonfarm business sector productivity indicated a 4.2% decline during Q4'20...
EMU Unemployment Rate Steadies in January
The overall EMU unemployment rate was steady in January, off peak, but still elevated...
U.S. ADP Nonfarm Private Payroll Increase Disappoints in February
Job market strength moderated last month....
U.S. ISM Services Index Weakens in February
The ISM Composite Index of Services Activity declined to 55.3 during February...
Viewpoints
Commentaries are the opinions of the author and do not reflect the views of Haver Analytics.
by Tom Moeller October 22, 2020
• Expectations resume upward trend.
• Pricing power deteriorated.
The Federal Reserve Bank of Kansas City reported that its manufacturing sector business activity index rose to 13 in October after falling to 11 in September from 14 in August. These figures remained up from the low of -30 in April.
The ISM-Adjusted Index (NSA) rose to 56.2 after falling to 54.9 in September. It remained up from the low of 37.6 in April.
Increases in the current conditions measures were broad-based. New orders, shipments, employment and production each recovered after declining in September. The supplier delivery speed measure fell sharply, however, indicating the quickest delivery speeds in three months. The raw materials inventory index rose to 1 from -6 in September and from -5 in October of last year.
On the inflation front, the prices received index for finished products reversed its September improvement with a decline to 4, though that remained up from deflationary readings during earlier this year. The raw materials index surged, however, to the highest level since November 2018.
The expectations-in-six months composite reading increased to 21 from 18 in September. It remained up sharply from -19 in March. Expected new orders, employment and production improved. The expected backlog of new orders slipped m/m but is up sharply from negative reading early this year and late in 2019.
Expectations of pricing pressures weakened. The finished product price measure fell m/m to 26, but remained up from 18 twelve months ago. The expected raw materials price measure surged to 55, up from 4 six months earlier and 25 twelve months ago.
The composite index is an average of the production, new orders, employment, supplier delivery time and raw materials inventory indexes. The diffusion indexes are calculated as the percentage of total respondents reporting increases minus the percentage reporting declines. The October survey was conducted during the third week of the month and included 95 responses from plants in Colorado, Kansas, Nebraska, Oklahoma, Wyoming, northern New Mexico and western Missouri. 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'19 | 2019 | 2018 | 2017 |
---|---|---|---|---|---|---|---|
Conditions Versus One Month Ago (% Balance) | 13 | 11 | 14 | -2 | 0 | 17 | 14 |
ISM-Adjusted Composite Index (NSA) | 56.2 | 54.9 | 55.0 | 48.5 | 50.0 | 58.9 | 56.7 |
New Orders Volume | 26 | 23 | 26 | -9 | -3 | 17 | 17 |
Number of Employees | 9 | 7 | 9 | -5 | -1 | 17 | 15 |
Production | 23 | 18 | 23 | 7 | 2 | 19 | 17 |
Prices Received for Finished Product | 4 | 12 | 4 | 4 | 7 | 22 | 7 |
Expected Conditions in Six Months | 21 | 18 | 19 | 4 | 12 | 28 | 26 |
New Orders Volume | 24 | 23 | 21 | 11 | 17 | 35 | 35 |
Number of Employees | 22 | 19 | 26 | 6 | 15 | 33 | 39 |
Production | 31 | 25 | 20 | 5 | 19 | 40 | 40 |
Prices Received for Finished Product | 26 | 34 | 16 | 18 | 26 | 42 | 27 |