Kansas City Fed Manufacturing Index

Highlights Tenth District manufacturing activity rose moderately from last month, although producers' expectations for future activity eased somewhat. Price indexes were mixed, with a reduction in future materials prices but a slight increase in future selling prices. The month-over-month composite index was 6 in July, up from minus 5 in June and 2 in May. Production increased at both durable and non-durable goods-producing plants, particularly in food, machinery, and aerospace products. Most other month-over-month indexes also improved. The production index increased from minus 17 to plus 21, its highest level since June 2011, and the shipments and new orders indexes also rose markedly. In contrast, the order backlog index edged lower from minus 4 to minus 7, and the employment index also eased slightly. The finished goods inventory index fell from 6 to 1, while the raw materials inventory index was unchanged. Most future factory indexes moderated somewhat in July but still remained relatively solid.

Market Consensus before announcement The Kansas City Fed manufacturing index was minus 5 in June, down from 2 in May but equal to minus 5 in April and March. The composite index is an average of the production, new orders, employment, supplier delivery time, and raw materials inventory indexes. Production fell at both durable and non-durable goods-producing plants. Other month-over-month indexes showed mixed results. The production index dropped from 5 to minus 17, its lowest level since March 2009, and the shipments and new orders indexes also fell markedly. The order backlog and employment indexes increased somewhat but still remain slightly below zero. Both inventory indexes edged higher after falling in May.