The final revision to the S&P Global US Purchasing Managers’ Index (PMI) for February showed that the US manufacturing sector experienced a quicker pace of improvement, indicating that the economy expanded at an above-average speed. The PMI survey revealed that business activity cooled in February, particularly in the services sector, but manufacturing saw an acceleration in activity growth. This boost in production and sustained high levels of business confidence can be attributed to signs of reduced inventory and a decrease in prices paid for inputs. Overall, the US economy remains in good health despite the slight slowdown in services.

Key Points:

The final revision of the S&P Global US Purchasing Managers’ Index (PMI) for February indicates a faster pace of improvement in the manufacturing sector.

Business activity cooled in February, with a slowdown in the services sector.

Manufacturing activity saw an acceleration in growth.

Reduced inventory and falling prices for inputs contributed to the boost in production.

The US economy remains in good health despite the slight slowdown in services.

“Signs of inventory reduction policies becoming less widespread also helped boost production and sustain high levels of business confidence.” – S&P Global

In February, the US manufacturing sector saw an acceleration in activity growth, as indicated by the S&P Global PMI index. This positive trend is powered by stronger orders growth, suggesting that the sector is experiencing its fastest pace of expansion since 2022. While there may be concerns about the cooling of business activity in other sectors, the overall health of the US economy remains steady. The slight slowdown in services does not overshadow the growth and confidence witnessed in the manufacturing sector.

“US manufacturing activity expanded at the fastest pace since September 2022, powered by stronger orders growth.” – Bloomberg

As a result of the strong manufacturing activity, the US dollar has remained firm following the release of the mixed S&P PMIs. The data shows that the US economy continues to grow steadily and that US manufacturers are leading the way. Meanwhile, gold prices have remained neutral, potentially due to the mixed PMI data. The upcoming ISM survey at 10 am ET is expected to provide further insights into the state of the US manufacturing sector.