Global| Apr 26 2018Kansas City Federal Reserve Factory Index Hits Record High
by:Tom Moeller
|in:Economy in Brief
Summary
The Federal Reserve Bank of Kansas City reported that its index of regional manufacturing sector business activity surged to a record 26 in April following stability during the prior two months at 17. The index was up from its low of [...]
The Federal Reserve Bank of Kansas City reported that its index of regional manufacturing sector business activity surged to a record 26 in April following stability during the prior two months at 17. The index was up from its low of -12 in December 2015.
The ISM-Adjusted index also jumped to a record 63.8 (NSA), up versus 41.5 in December 2015. During the last ten years, there has been a 59% correlation between this index and the q/q change in real GDP.
Movement amongst the index components was generally positive. The new orders, shipments and production readings surged. The supplier delivery time measure retraced its May jump, indicating sharply quickened delivery times. Order backlogs also increased to a record level.
The employment reading was stable at its record high. Thirty-four percent of respondents reported increased hiring while ten percent reported a decline in job levels. The employee workweek measure declined following its March surge.
The index of finished goods prices increased to the highest level since September 2008. Thirty-eight percent of respondents paid higher prices, while five percent paid less. The raw materials prices index eased from the highest point since April 2011.
The overall expectations index declined moderately for the second straight month. Expected orders and employment declined while expected shipments and production improved. Expected export orders fell sharply m/m to the lowest level since December. The expected workweek improved following a sharp decline in March.
Expected finished goods prices improved m/m and matched the highest level since August 2008. Expected raw materials prices eased m/m, but remained strong versus the 2015 low.
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 '17 | 2017 | 2016 | 2015 |
|---|---|---|---|---|---|---|---|
| Conditions Versus One Month Ago (% Balance) | 26 | 17 | 17 | 10 | 14 | -2 | -5 |
| ISM-Adjusted Composite Index (NSA) | 63.8 | 59.6 | 58.2 | 52.5 | 56.7 | 48.5 | 46.8 |
| New Orders Volume | 37 | -1 | 16 | 11 | 17 | -2 | -8 |
| Number of Employees | 26 | 26 | 23 | 11 | 15 | -6 | -10 |
| Production | 33 | 20 | 21 | 15 | 17 | 1 | -5 |
| Prices Received for Finished Product | 29 | 24 | 26 | 6 | 7 | -7 | -5 |
| Expected Conditions in Six Months | 31 | 33 | 38 | 19 | 26 | 9 | 4 |
| New Orders Volume | 30 | 42 | 49 | 18 | 35 | 19 | 11 |
| Number of Employees | 35 | 36 | 41 | 29 | 31 | 8 | 6 |
| Production | 44 | 42 | 56 | 29 | 41 | 20 | 12 |
| Prices Received for Finished Product | 53 | 48 | 53 | 27 | 27 | 7 | 9 |
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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