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US Manufacturing Industry Rebounds Sharply in February: Markit

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US Manufacturing Industry Rebounds Sharply in February: Markit

The US manufacturing industry rebounded strongly in February, a sign manufacturers recovered from the weather-induced slowdown that halted new orders last month.

Markit Group’s gauge of US manufacturing activity rose 3 percentage points to 56.7 in February, far exceeding estimates. A reading above 50 is a general sign of expansion in manufacturing activity, whereas a reading below that level signifies contraction.

Manufacturers reported the sharpest expansion in business activity since May 2010, led by new business volumes and rising production levels. New business also expanded at the fastest pace since May 2010, a sign underlying demand remains strong across the manufacturing industry. After declining in January, new export orders were positive again, Markit data showed.

Inflows of new work spurred job creation for the eighth consecutive month. Employment rose at the fastest clip since March 2013, which could reflect a broader trend across the US economy in February. Economists believe severe weather in January not only halted production levels, but constrained the pace of hiring.

“The flash manufacturing PMI provides the first indications that production has rebounded from the weather-related slowdown seen in January,” Markit chief economist Chris Williamson wrote in a statement. “While the strong PMI reading in part represents a rebound from the temporary weakness seen at the start of the year, further growth looks likely in coming months, suggesting the underlying health of the economy remains robust.”

With business returning to normal after an unusually cold winter, the world’s largest economy is expected to regain momentum in March. The latest PMI data suggest the “underlying health of the economy remains robust,” added Williamson.

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