• Employment & production increase.

• New orders & shipments ease.

• Price power improves.

The Federal Reserve Bank of Kansas City reported that its manufacturing sector business activity index rose to 24 during January following two months at 22. The series dates back to July 2001. The ISM-Adjusted Index (NSA) eased to 59.0 this month, below last April's high of 66.7.

The employment measure rose to 24 after falling in each of the prior two months. It remained below a high last April of 30. The production measure improved to 20, the highest level in six months.

Working lower was the new orders measure to 14, but it remained above the November low of -2. The shipments measure also fell to 5 from 13. The figure has trended lower since hitting a high of 34 last April.

Inflation pressures intensified this month. The prices received index for finished products rose to 49 after falling to 46 in December. It remained below, however, the record level of 57 in August. The raw materials index declined to 64 in January and remained below the record of 88 last May.

The expectations reading for six months ahead rose to 37, an eight-month high. The employment measure surged to a record high while broad-base gains were exhibited in all of the other component series.

The latest survey was conducted in the five-day period from January 19-24 and included 104 responses from plants in Colorado, Kansas, Nebraska, Oklahoma, Wyoming, northern New Mexico and western Missouri.

The series dates back to July 2001. The diffusion indexes are calculated as the percentage of total respondents reporting increases minus the percentage reporting declines. Data for the Kansas City Fed Survey can be found in Haver's SURVEYS database.