That 1.6% GDP growth rate for the U.S. during the final calendar quarter of 2005 is looking more and more like what former Federal Reserve chairman Alan Greenspan would call a "soft patch."
The latest evidence: U.S. manufacturers picked up their pace in February 2006. With new orders, production and employment all growing faster in February than in January, the Institute for Supply Management's (ISM) closely watched manufacturing index rose to 56.7% in the second month of 2006, an increase of 1.9 percentage points from January's mark of 54.8%.
A figure above 50% indicates that the manufacturing sector of the U.S. economy generally is growing; a figure below 50% signals the sector is contracting.
Not all the data were positive, however. "On the downside, the supplier deliveries index, [a component of the overall index], slowed, offsetting a portion of the overall improvement," noted Norbert J. Ore, chair of ISM's manufacturing business survey committee. And "prices, driven by volatility in energy markets, continue to be a major source of concern for ISM's survey respondents," he added. Prices that manufacturers paid for commodities in February increased for the seventh consecutive month, although more slowly than in January. Aluminum, chemicals, linerboard, natural gas nickel, paper, petroleum products, plastics and stainless steel were among the items for which prices increased in February.