U.S. manufacturing activity picked up more than expected in February as COVID-19 infections subsided, though hiring at factories slowed, contributing to keeping supply chains snarled and prices for inputs high, Reuters reported. The Institute for Supply Management (ISM) said yesterday that its index of national factory activity increased to a reading of 58.6 last month from 57.6 in January, which was the lowest since November 2020. A reading above 50 indicates expansion in manufacturing, which accounts for 11.9% of the U.S. economy. Economists polled by Reuters had forecast the index rising to 58.0. Manufacturing is regaining momentum in line with the broader economy after hitting a speed bump as coronavirus infections, driven by the Omicron variant, surged across the country. The ISM survey's forward-looking new orders sub-index increased to 61.7 last month from 57.9 in January, which was the lowest reading since June 2020. Goods spending has surged as the pandemic curbed demand for services like travel. Even if spending reverts back to services as the health situation improves, economists expect demand for goods to remain strong. The survey's measure of factory employment slipped to a reading of 52.9 last month from a 10-month high of 54.5. It had increased for five straight months.
