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Kansas City Fed Manufacturing Activity increased slightly in June
Tenth District manufacturing activity increased slightly, posting a positive reading for the first time in eighteen months. Expectations for future activity remained generally solid, and most price indexes rose modestly.
The month-over-month composite index was 2 in June, up from -5 in May and -4 in April. The composite index is an average of the production, new orders, employment, supplier delivery time, and raw materials inventory indexes. The improvement came from both durable and nondurable goods-producing plants, particularly aircraft, food, plastics, and electronic equipment. Most month-over-month indexes increased markedly. The production index jumped from -11 to 12, and the shipments, news orders, and order backlog indexes also rose considerably. The employment index edged up from -13 to -4, its highest level in over a year. The finished goods inventory index edged up from -12 to -5, while the raw materials inventory index was unchanged.
Year-over-year factory indexes improved moderately but remained negative. The composite year-over-year index was rose from -19 to -15, and the production, shipments, new orders, order backlog, and employment indexes also increased slightly. The capital spending index improved from -15 to -3, its highest level in seven months. The raw materials inventory index fell from -15 to -22, while the finished goods inventory index inched higher.
Future factory indexes were mixed in June but remained generally solid. The future composite index edged up from 4 to 7, and the future order backlog and employment indexes moved back into positive territory. The future capital spending index increased from -3 to 8, and the new orders for exports index also climbed higher. The future production index was unchanged, while the future shipments and new orders indexes eased slightly. Both future inventory indexes fell further into negative territory.
Price indexes rose modestly or were unchanged in June. The month-over-month finished goods price index rose from -8 to -4, while the raw materials price index was basically unchanged. The year-over-year finished goods price index jumped from -4 to 8, and the raw materials price index also increased markedly. The future finished goods price index edged higher from -1 to 5, while the future raw materials price index was unchanged for the third straight month.
Posted: June 23, 2016 Thursday 11:00 AM