Global| Apr 23 2020Kansas City Fed Factory Index Weakens Further
by:Tom Moeller
|in:Economy in Brief
Summary
• Midwest economic activity is under pressure. • New orders, employment and prices are falling. • Expectations improve modestly. The Federal Reserve Bank of Kansas City reported that its manufacturing business activity index declined [...]
• Midwest economic activity is under pressure.
• New orders, employment and prices are falling.
• Expectations improve modestly.
The Federal Reserve Bank of Kansas City reported that its manufacturing business activity index declined to a record low of -30 in April following a collapse to -17 in March. It indicated major recession in the area's factory sector activity. The index of expectations in six months improved to -6 from an eleven year low of -19.
The ISM-Adjusted Index fell to 37.6 (NSA) in April from 43.1 in March. It remained down from the May 2018 high of 64.2.
The current condition components all weakened this month with new orders, shipments and production each falling sharply. The employment index eased further into negative territory, nearly touching its March 2009 low. The export measure fell to a record low. The employee workweek measure fell deeper into negative territory where it's been since November.
On the inflation front, prices received for finished products remained negative. The fall to -14 compares to a high of +27 in August 2018. The raw materials prices index remained depressed.
The index measuring expectations in six months improved m/m, but remained negative at -6. New orders, shipments, production and employment were less negative.
Expected finished product prices turned positive, as did expected raw materials prices.
The diffusion indexes are calculated as the percentage of total respondents reporting increases minus the percentage reporting declines. The survey includes 93 responses from plants in Colorado, Kansas, Nebraska, Oklahoma, Wyoming and northern New Mexico and was conducted mid-month. 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'19 | 2019 | 2018 | 2017 |
|---|---|---|---|---|---|---|---|
| Conditions Versus One Month Ago (% Balance) | -30 | -17 | 5 | 4 | 0 | 17 | 14 |
| ISM-Adjusted Composite Index (NSA) | 37.6 | 43.1 | 52.7 | 53.5 | 50.0 | 58.9 | 56.7 |
| New Orders Volume | -64 | -38 | 8 | 6 | -3 | 17 | 17 |
| Number of Employees | -34 | -32 | -4 | 1 | -1 | 17 | 15 |
| Production | -62 | -18 | 8 | 9 | 2 | 19 | 17 |
| Prices Received for Finished Product | -14 | -6 | 9 | 10 | 7 | 22 | 7 |
| Expected Conditions in Six Months | -6 | -19 | 16 | 12 | 12 | 28 | 26 |
| New Orders Volume | -8 | -35 | 21 | 13 | 17 | 35 | 35 |
| Number of Employees | -10 | -19 | 20 | 19 | 15 | 33 | 39 |
| Production | -8 | -36 | 21 | 16 | 19 | 40 | 40 |
| Prices Received for Finished Product | 2 | -10 | 28 | 34 | 26 | 42 | 27 |
Tom Moeller
AuthorMore in Author Profile »Prior to joining Haver Analytics in 2000, Mr. Moeller worked as the Economist at Chancellor Capital Management from 1985 to 1999. There, he developed comprehensive economic forecasts and interpreted economic data for equity and fixed income portfolio managers. Also at Chancellor, Mr. Moeller worked as an equity analyst and was responsible for researching and rating companies in the economically sensitive automobile and housing industries for investment in Chancellor’s equity portfolio. Prior to joining Chancellor, Mr. Moeller was an Economist at Citibank from 1979 to 1984. He also analyzed pricing behavior in the metals industry for the Council on Wage and Price Stability in Washington, D.C. In 1999, Mr. Moeller received the award for most accurate forecast from the Forecasters' Club of New York. From 1990 to 1992 he was President of the New York Association for Business Economists. Mr. Moeller earned an M.B.A. in Finance from Fordham University, where he graduated in 1987. He holds a Bachelor of Arts in Economics from George Washington University.
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