US Kansas Fed Manufacturing Index Rebounds in February

The Kansas City Fed’s Manufacturing Production Index surged to 10 in February 2026, rebounding from -2 in January, signaling renewed output growth. Future activity expectations edged higher, with employment outlooks also improving. Input and finished goods prices cooled moderately, suggesting easing inflationary pressure in the sector. Meanwhile, the composite index which is an average of the production, new orders, employment, supplier delivery time, and raw materials inventory indexes, rose to 5 from 0. Nondurable manufacturing activity declined further, while durable manufacturing activity edged higher, driven by primary metal and electrical equipment manufacturing.

The Kansas City Fed’s Manufacturing Production Index remained in negative territory at -2 in January 2026, little changed from -3 in December, indicating the second consecutive month of contraction in factory activity. Expectations for future activity cooled but remained expansionary. Prices paid for raw materials increased further this month, while finished product prices growth cooled.

The Kansas City Fed’s Manufacturing Production Index fell to -3 in December 2025, from an over 3-1/2-year high of 18 in November, marking the first contraction in manufacturing since July, albeit mild. Growth in both durable and nondurable manufacturing eased from last month, led by declines in food, metal, and transportation equipment production. Month-over-month indexes were mixed: production and employment slipped slightly into negative territory after strong readings in the previous month, while shipment and new order volumes remained unchanged at 0. Year-over-year indexes were mostly negative and lower than last month, with production and shipments declining and employment falling from 5 to -7. In contrast, capital expenditures rose from 9 to 14, and new orders ticked up from -3 to 2. Expectations for future activity remained positive, with the composite index increasing from 9 to 13.