Manufacturing in the U.S. grew at the fastest rate in almost seven years during the second month of the year, signaling that the sector will continue to drive economic growth, according to The Wall Street Journal. On Tuesday, the Institute for Supply Management reported that its index of manufacturing activity rose to 61.4 in February from 60.8 the month before as growth accelerated. The February reading was the highest since May 2004, and outpaced economists 61-point forecast.
The ISM report also showed that the price sub-index increase by half a point to 82.0, signaling that inflationary pressures are continuing to rise. Hiring was seen strongly up at 64.5 after 61.7 in January, and the production index was jumped as well. New orders growth remained strong but only edged up slightly, while inventories slipped to 48.8, signaling a contraction. A separate report from the Commerce Department showed that construction spending dropped 0.7% in February from the month before to a seasonally adjusted $791.82 billion.