Kansas City Fed Manufacturing Activity Flat

Tenth district manufacturing activity was flat in June, with the composite index shedding 4 points to 0, the lowest level since 2016. Weaker than the consensus forecast calling for a marginal slip, the drop in the composite reading was led by a 7-point decline in shipments, a decrease of 3 points in production, and a 7-point decrease in backlog of orders. Production at durable goods plants drove the decline, weakening most at plants producing computers, electronic products and transportation equipment. Partly offsetting the weakness elsewhere and giving some hope of a future strength was a 5 point rise in new orders. Price indexes were lower than a month ago, indicating that prices continue to rise but at a slower pace, with the raw materials price index lower than a year ago, and expectations for future price increases declining.