Economic Watch: Manufacturing, Spending, Income Jump; Construction Flat but Strong
Manufacturing in the U.S. continued its hot streak in February, but there are questions following other data released earlier about the sector. Personal incomes and expenditures were up, and construction spending remained robust despite little change from the month before.
Economic activity in the manufacturing sector, as measured by the Institute for Supply Management’s Purchasing Managers Index (PMI), registered 60.8%. That’s an increase of 1.7 percentage points from the January reading, which marked the 18th month of growth.
A reading above 50% indicates expansion. February’s report is the highest reading since May 2004 and beat analysts’ expectations.
The New Orders Index registered 64.2%, a decrease of 1.2 percentage points from the January reading of 65.4%. The Production Index registered 62%, a 2.5 percentage point decrease compared to the January reading of 64.5%.
Comments from the panel reflect expanding business conditions, according to the report. New orders and production maintained high levels of expansion; employment expanded at a faster rate to support production, order backlogs expanded at a faster rate, and export orders and imports continued to grow faster in February.
Of the 18 manufacturing industries surveyed, 15 reported growth last month.
“Alongside strong domestic demand come encouraging signs of robust foreign demand,” said Fotios Raptis, senior economist at TD Economics. “New export orders surged to a cycle-high, and PMI manufacturing surveys reported this morning suggest that global demand for manufactured goods remains strong in many parts of the world. This bodes well for first quarter global trade volumes and economic activity more broadly.”
Markit Manufacturing Report Also Strong
A similar report from the financial information services provider IHS Markit was nearly as positive, showing one of the strongest improvements in the health of the U.S. manufacturing sector seen over the past three years, led by a sharp expansion in new orders.
Its U.S. Manufacturing Purchasing Managers’ Index (PMI) registered …Read the rest of this story
