All five regional Federal Reserve manufacturing indexes fell in June -- some sharply -- in the first simultaneous drop in six months, adding to signs of weakness in a sector battered by slowing global demand and trade tensions.
The Kansas City Fed’s factory index dropped four points to 0, indicating manufacturing stalled, according to a report Thursday. It was the lowest reading since November 2016 and the measure’s third consecutive decline. The district bank covers Kansas, Colorado, Nebraska, Oklahoma and Wyoming, as well as parts of Missouri and New Mexico.
The report follows a deterioration in manufacturing gauges from the Fed banks in New York, Philadelphia, Richmond and Dallas, all based on regional surveys of companies. The New York state index turned negative for the first time since October 2016 as new orders, inventories and worker hours contracted. Richmond’s measure eased, while the Dallas measure fell to a three-year low.
Respondents in the Kansas City survey cited difficulty finding qualified workers and the fallout of the trade war with China. Still, most manufacturers reported confidence in the U.S. economy, and on balance companies expect to increase capital expenditures and employment over the next six months.
© Copyright 2023 Bloomberg News. All rights reserved.