Saturday, 2 March 2013

Manufacturing grows in US, weaker elsewhere

US economic data on Friday were mostly positive.

The Institute for Supply Management’s manufacturing PMI rose to 54.2 in February, the highest reading since June 2011, from 53.1 in January. Personal spending rose 0.2 percent in January even as incomes fell 3.6 percent, giving back the gains from the previous two months. Indeed, consumer confidence appears to have improved with the final Thomson Reuters/University of Michigan index of consumer sentiment for February coming in at 77.6, well up from 73.8 in January.

Confirmation of growth in US manufacturing activity came from Markit, whose US manufacturing PMI read 54.3 for February, down from 55.8 in January.

Marring the picture somewhat was a 2.1 percent fall in US construction spending in January, the biggest decline in 1½ years.

Economic data elsewhere on Friday were mostly weak.

In the euro area, manufacturing activity continued to contract in February, Markit's manufacturing PMI for the region staying unchanged at 47.9. Other data for the euro area showed that inflation cooled to 1.8 percent in February from 2.0 percent in January and the unemployment rate rose to a record 11.9 percent in January from 11.8 percent in December.

There were also weak data from the UK on Friday. The Markit/CIPS manufacturing PMI for the UK fell to 47.9 last month from 50.5 in January. Another report showed that mortgage approvals fell to 54,719 in January from 55,632 in December.

Even in China, manufacturing barely showed growth in February. The manufacturing PMI from the National Bureau of Statistics and the China Federation of Logistics and Purchasing fell to 50.1 in February, the lowest in five months, while HSBC's manufacturing PMI fell to 50.4, the lowest in four months.

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