| Consensus | Consensus Range | Actual | Previous | |
| Composite Index | 52.3 | 52.8 | ||
| Manufacturing Index | 51.9 | 51.8 to 52.1 | 51.2 | 51.9 |
| Services Index | 52.3 | 52.5 |
Highlights
The S&P Global US Composite Purchasing Managers' Index preliminary reading came in at 52.3 in February compared to 53.0 in January, and 52.7 in December, a sign of cooling economic growth rate although the severe winter weather was blamed. Meanwhile employment only rose slightly.
The increase in the pace of business activity was the weakest in ten months, with moderating activity reported in both the services and manufacturing sectors.
The US Services PMI Business Activity Index recorded 52.3 in February, compared to 52.7 in January, and 52.5 in December.
The Manufacturing PMI's preliminary reading came in at 51.2, compared to 52.4 in January and expectations for 51.9 in the Econoday survey of forecasters.
The deceleration in activity reflecting weakened order book trends, in turn led by falling exports, though adverse weather was partly to blame, the report said.
Employment rose only marginally as companies worried about weak sales and high costs.
On the inflation front, average input costs spiked again in February, due to price hikes by suppliers, tariffs and higher wages. This resulted in the largest increase in average selling prices since last August.
Measured across goods and services, input cost inflation ticked higher and remained elevated above long-run levels in both sectors, albeit below some of the peaks seen last year, it said.
In a more hopeful sign, business expectations for the year ahead jumped to the highest for just over a year, adding to signs that at least part of February's slowdown may prove temporary, the report said. However, concerns remain among many businesses regarding the adverse impact of tariffs and the broader uncertain political environment.
Market Consensus Before Announcement
Manufacturing PMI is seen at 51.9 in February flash versus 52.4 in the January final.
Definition
The flash Composite Purchasing Managers' Index (PMI) provides an early estimate of current private sector output by combining information obtained from surveys of around 1,000 manufacturing and service sector companies. The flash data are released around 10 days ahead of the final report and are typically based upon around 85 percent of the full survey sample. The report tracks changes in variables such as new orders, stock levels, employment and prices across both manufacturing and services. Production is also tracked, defined as"production" for manufacturing and"output" for services. Results are synthesized into a single index which can range between zero and 100. A reading above (below) 50 signals rising (falling) output versus the previous month and the closer to 100 (zero) the faster output is growing (contracting). The report also contains flash estimates of the manufacturing and services PMIs. The data are produced by S&P Global.
Description
Investors need to keep their fingers on the pulse of the economy because it dictates how various types of investments will perform. By tracking economic data such as the purchasing managers' manufacturing indexes, investors will know what the economic backdrop is for the various markets. The stock market likes to see healthy economic growth because that translates to higher corporate profits. The bond market prefers less rapid growth and is extremely sensitive to whether the economy is growing too quickly and causing potential inflationary pressures.