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U.S. Manufacturing and Service-Sector Data Beats Market’s Expectations in March
While it’s too soon for the final numbers, preliminary March manufacturing and service-sector data indicate that the U.S. Manufacturing Purchasing Managers Index will increase to 49.3, beating the market’s expectations of 47. This modest improvement in production gain for manufacturing is attributed to improving supply chains. After contracting for five consecutive months, global manufacturing stabilized and rose to 50.0 in February, according to the Global Manufacturing Purchasing Managers’ Index.
Turning to production, manufacturing production increased slightly in February by 0.1%, a decline from the 1.3% increase seen in January. Over the past 10 months, manufacturing output has weakened by 2.1% due to continued geopolitical and economic uncertainties.
Despite rising interest rates, a slight uptick in unemployment, and an emerging banking crisis, the economy still added 311,000 jobs in February and remains resilient. Businesses and manufacturers still need workers, as there are 5.1 million more job openings than unemployed workers.
According to the U.S. Department of Labor, the Producer Price Index declined 1% in February. However, producer prices have increased 4.6% for final demand good and services over the last 12 months.
In February, the Consumer Price Index rose by 0.4% and 6% year over year, a decline from a 6.4% increase in January. Excluding food and energy prices, the core CPI rose 0.5% in February and 5.5% over the past 12 months.
With a goal of bringing inflation down to 2%, the Federal Reserve has the unenviable task of choosing between fighting inflation or stabilizing the banking industry. On March 22nd, despite growing concerns from the banking industry, the Federal Reserve chose to further hike interest rates by 0.25 percentage points, the ninth consecutive rate increase since last March, leading to concerns that banks will contract available credit and lending, and, in so doing, slow economic growth.
As we continue to navigate these choppy waters, the Vermont Chamber will continue its work to advance Vermont’s economy and provide you with advocacy, access to resources and supply chain contacts, and the need-to-know information on the state of manufacturing at the local, national, and global level.
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