Business is very brisk in the Kansas City Fed's manufacturing sample, posting an April index of 26. New orders have absolutely surged this month, to 37 from March's minus 1 with the business coming from domestic customers, not foreign ones as export orders came in barely over zero at only plus 1. Domestic or not, backlog orders are especially strong, up 15 points from last month to 29.
Tariff effects, if any, are scant though raw material inventories are up 6 points to 17 and could reflect the stockpiling of metals. Evidence of capacity stress, despite strength in shipments which rose 25 points to 37, is limited with delivery times still slowing but less so than the prior month, and with input costs and selling prices both very elevated. Not elevated, however, is the workweek and new workers are still available as the employment index is steady at a robust 26.
Six-month outlooks in various regional reports have been moving lower following the imposition of metal tariffs though the drift downward in this report has been limited, to 31 this month from 33 in March and 38 in February. Manufacturing data are showing uneven spots, such as this morning's durable goods report, but overall indications, like this report, are increasingly pointing to a factory sector that is gaining momentum.