Kansas City Fed Factory Sector Activity Improves

The Federal Reserve Bank of Kansas City reported that its Composite index of 10th District factory sector activity recovered to 7 this month after falling sharply to 4 in October. Nevertheless, the figure remained near the middle of its recent range. The new orders component fell sharply but the employment reading jumped. The composite index is an average of the production, new orders, employment, supplier delivery time and raw materials inventory indexes. The prices paid index rebounded to its level three months ago.

The expectations reading increased to its highest level since January, suggesting future improvement in business conditions. The employment figure surged to its highest level since 2006 while the raw materials inventory series also returned to its 2006 best. The shipments series gained only to the middle of the recent range and new orders slipped to the middle of its recent range. Capital expenditures slipped to the lowest level since December and the expected prices paid index remained range-bound.

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 northern New Mexico. Data for the Kansas City Fed Survey can be found in Haver's SURVEYS database.