Global| Jan 22 2015Kansas City Fed's Factory Sector Index Deteriorates; Prices Turn Lower
by:Tom Moeller
|in:Economy in Brief
Summary
The Federal Reserve Bank of Kansas City reported that its Composite index of 10th District factory sector activity fell back to 3 this month, the lowest level since August. A negative new orders figure accounted for much of the [...]
The Federal Reserve Bank of Kansas City reported that its Composite index of 10th District factory sector activity fell back to 3 this month, the lowest level since August. A negative new orders figure accounted for much of the deterioration as it declined to the lowest level since February 2013. The employment reading also fell to neutral, its weakest point since August. The composite index is an average of the production, new orders, employment, supplier delivery time and materials inventory indexes. The prices paid index fell m/m to -3, the lowest level since July 2010. The index of prices paid for raw materials ticked up a point but remained near the lowest level of the economic expansion.
The expectations reading held steady at the lowest level in three months, but it still suggested future improvement in business conditions. Expected new orders remained in a range suggesting moderate improvement while the expected shipments figure improved to its highest point since April. While still suggesting positive growth, expected employment returned to its lowest point in three months. The employee workweek rose and remained in the range of the last year. Expected capital expenditures fell back to the lowest level since March. Expected pricing power for finished products weakened slightly but expected raw materials prices fell to nearly the lowest level of the economic recovery.
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.
| Kansas City Federal Reserve Manufacturing Survey (SA) | Jan | Dec | Nov | Jan '14 | 2014 | 2013 | 2012 |
|---|---|---|---|---|---|---|---|
| Conditions Versus One Month Ago (% Balance) | 3 | 8 | 6 | 5 | 6 | 0 | 4 |
| New Orders Volume | -8 | 14 | 0 | 6 | 8 | 1 | 0 |
| Number of Employees | 0 | 8 | 8 | 10 | 5 | -2 | 5 |
| Prices Received for Finished Product | -3 | 1 | 5 | 7 | 5 | 4 | 5 |
| Expected Conditions in Six Months | 19 | 19 | 21 | 25 | 17 | 10 | 12 |
| New Orders Volume | 24 | 23 | 24 | 35 | 26 | 18 | 21 |
| Number of Employees | 24 | 30 | 28 | 29 | 18 | 9 | 13 |
| Prices Received for Finished Product | 27 | 28 | 24 | 27 | 26 | 24 | 24 |
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.
