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Manufacturing Output Hits 17-Month High

Manufacturing activity rose to a 17-month high in February, while the services sector saw a slowdown, according to Reuters.

What’s going on: “S&P Global said on Thursday that its flash U.S. Composite PMI Output Index, which tracks the manufacturing and services sectors, slipped to 51.4 this month from 52.0 in January” while “[m]anufacturing activity perked up, with the survey’s flash manufacturing PMI rising to 51.5, the highest reading since September 2022, from 50.7 in the prior month.”

  • Any reading below 50 indicates contraction.
  • The latest survey suggests the economy continued to expand this month despite other weak data readings, including retail, manufacturing output and home construction.

Why it happened: Better weather conditions helped improve supplier delivery times, which facilitated greater factory output, according to S&P Global Market Intelligence Chief Business Economist Chris Williamson.

Why it’s important: “Although up slightly in February, the survey’s gauge of selling prices for goods and services continues to run at a level consistent with the Fed hitting its 2% inflation target, and a further fall in cost growth to the lowest since October 2020 hints at price pressures remaining subdued in the coming months,” Williamson said.

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