The Institute for Supply Management (ISM) is set to release the February United States (US) Manufacturing Purchasing Managers’ Index (PMI) on the first business day of March. This report is highly anticipated as it is considered a reliable indicator of the US manufacturing sector’s health and the direction of the overall economy.
The figures are expressed in percentages, with anything above 50.0 indicating expansion and readings below reflecting business contraction. The US February Manufacturing PMI is expected to improve to 49.5 from the December reading of 49.1, although it will still fall short of the desired threshold.
Market players will also pay attention to the ISM Prices Paid Index and the Employment Index, which are closely watched by speculative interest. In January, the New Orders Index moved into expansion territory at 52.5, suggesting an improving demand outlook. The Prices Index also registered an increase, signaling heating price pressures. However, the Employment Index saw a slight decrease.
Investors will be looking for signs of further expansion, such as an increase in the New Orders sub-component and easing price pressures. A headline reading above 50.0 should indicate above-expectations expansion, leading to potential positive impacts on financial markets. High-yielding assets such as stocks may see an upward trend, while the US Dollar may come under selling pressure amid increased risk appetite.
Furthermore, in relation to inflation, the US released the January Core Personal Consumption Expenditures (PCE) Price Index. The report indicated that PCE inflation did not move the bar significantly, providing additional context for the upcoming ISM Manufacturing PMI report.
The upcoming release of the ISM Manufacturing PMI is expected to shed light on the state of the US manufacturing sector and provide valuable insights into the overall economic landscape. Market participants will closely analyze the report, looking for indications of growth and potential market impacts.
