Global| Jul 28 2016Kansas City Federal Reserve Factory Sector Index Declines; Expectations Improve
by:Tom Moeller
|in:Economy in Brief
Summary
The Federal Reserve Bank of Kansas City reported that regional manufacturing sector business activity deteriorated sharply during July, and completely reversed the improvement during the prior three months. The Composite Index of 10th [...]
The Federal Reserve Bank of Kansas City reported that regional manufacturing sector business activity deteriorated sharply during July, and completely reversed the improvement during the prior three months. The Composite Index of 10th District factory sector activity fell to -6, the weakest figure since March. Deterioration in the component readings was broad-based, notably for shipments, new orders and production. The materials inventories and employment figures also declined moderately as did export orders. Prices paid for finished products fell sharply, but raw materials prices eased following increases early this year.
The Composite Index reflecting 6-month expectations improved sharply to the highest reading since January of last year. The strength completely reversed deterioration through last September. Improvement was notable for new orders, production and the employee workweek. Expected export orders rose slightly. The increases in the employment and capital expenditures measures moderated. Expected prices for finished products jumped to the highest level in 12 months while raw materials prices also strengthened.
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) | Jul | Jun | May | Jul '14 | 2015 | 2014 | 2013 |
|---|---|---|---|---|---|---|---|
| Conditions Versus One Month Ago (% Balance) | -6 | 2 | -5 | -7 | -5 | 7 | 0 |
| New Orders Volume | -5 | 4 | -3 | -7 | -8 | 7 | 1 |
| Number of Employees | -5 | -4 | -13 | -17 | -10 | 5 | -2 |
| Prices Received for Finished Product | -11 | -4 | -8 | 2 | -5 | 5 | 4 |
| Expected Conditions in Six Months | 14 | 7 | 4 | 4 | 4 | 17 | 10 |
| New Orders Volume | 30 | 12 | 15 | 13 | 11 | 26 | 18 |
| Number of Employees | 6 | 13 | -4 | 5 | 6 | 18 | 9 |
| Prices Received for Finished Product | 13 | 5 | -1 | 13 | 9 | 26 | 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.
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