Kansas City Manufacturing Shows Surprising Gain

Where the sluggish report is harder to use a prediction is that the production index decelerated to 2 in July versus 12 in June.  That is substantial.  Meanwhile, the report’s new orders component improved to -4 from -7.  That is still in the red zone, just ‘less bad’ on a relative basis. Inventories posted a gain as well with the materials index rising to 13 in July from 5 in June.  A big boost was seen in the finished goods inventories component, which saw a rise to 9 in July from -2 in June.

Employment showed some gains here as the employment component posted a gain up to 6 in July versus 3 in June.

This came on a day where the broader equity indexes were already higher.  That being said, it is at least good to see some good news when the tape has been full of nothing but bad news.

JON C. OGG