The weakest of the regional reports is now solidly in line with other advance manufacturing surveys, pointing to breakout acceleration for the factory sector. The Kansas City index, which has spent most of 2 years deep in the negative column, rose 6 points to 20 for the March reading. This is the best score since March 2011.
New orders are also up 6 points to a very strong 32 with backlog orders up 2 points to what is also a very strong 21. High backlogs point to the need for hiring which, though slowing 4 points, is still solid at 13. Inventories are up, costs are up, and selling prices are showing traction. And general expectations, at 32, are the highest on record.
Yet strength for the last several months in the advance reports has panned out to only limited strength in definitive data out of Washington. Watch for the durable goods report on tomorrow's calendar.