- Best reading since June
- Prior was 46.8
- Manufacturing 47.8 vs 47.1 prior
- Composite 50.2 vs 47.5 prior
- New orders best since October
- Business optimism highest since May 2022
- Services "new export orders weighed on total new sales, as firms highlighted challenging demand conditions in key export markets"
This is a big one
Comments from S&P Global chief economist Chris Williamson:
“February is seeing a welcome steadying of business activity after seven months of decline. Despite headwinds from higher interest rates and the cost of living squeeze, the business mood has brightened amid signs that inflation has peaked and recession risks have faded. At
the same time, supply constraints have alleviated to the extent that delivery times for inputs into factories are improving at a rate not seen since 2009.
"However, there are some caveats to the good news. The upturn is being driven by the services sector, which in part reflects unseasonably warm weather, and although the manufacturing survey data are showing signs of improvement, the factory sector remains in contraction and focused on inventory reduction.
“Furthermore, the improved supply situation has taken price pressures out of manufacturing supply chains, but the survey data underscore how the upward driving force on inflation has now shifted to wages amid the tight labor market. By potentially stoking concerns over a wage- price spiral , accelerating service sector price growth will add to calls for higher interest rates, which could in turn subdue the nascent expansion.
Risk trades are bleeding on this report and the US dollar is stronger. That's the reaction you would expect on another sign that the US is nowhere near a recession. It will take some real nerve for the Fed to hold at around 5.25% if numbers like this keep rolling in.