U.S Factory Sector Cools in March; Inflation Pressures Rise

Data stateside this morning showed that U.S activity in the factory sector cooled last month, though a measure of prices for commodities rose quickly in a sign of rising inflation.

The ISM said its closely watched index of manufacturing activity fell to 59.3 in March from 60.8 in February. The market was expecting the index to fall to 59.8 m/m.

Note: In February, factory activity reached the highest level in 14-years.

Digging deeper, the report also showed that in March, an index of prices rose quickly to 78.1 from 74.2 m/m, while a measure of new orders fell to 61.9 from 64.2.

U.S Construction Spending Edges Up in February

Other data showed that spending on construction across the U.S rose slightly in February – more evidence of a weak start for building projects for this year.

Total U.S construction spending increased +0.1% m/m to a seasonally adjusted annual rate of +$1.27T in February – this comes on the back of a flat January reading.

Note: The market had expected a +0.5% gain in February.

Digging deeper, private construction was up +0.7%, public construction decreased -2.1% in February, dragged down by federal construction spending.

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Dean Popplewell

Dean Popplewell

Vice-President of Market Analysis at MarketPulse
Dean Popplewell has nearly two decades of experience trading currencies and fixed income instruments. He has a deep understanding of market fundamentals and the impact of global events on capital markets. He is respected among professional traders for his skilled analysis and career history as global head of trading for firms such as Scotia Capital and BMO Nesbitt Burns. Since joining OANDA in 2006, Dean has played an instrumental role in driving awareness of the forex market as an emerging asset class for retail investors, as well as providing expert counsel to a number of internal teams on how to best serve clients and industry stakeholders.
Dean Popplewell