Author: Zac Martin, Investment Associate
Week Ending March 7th – Tariff Anxiety
ISM Manufacturing PMI for February saw a slight decline of 0.6% but remained in expansion territory. This decline was led by New Orders Index, which remains volatile, shrinking 6.5%. Additionally, Employment continued to decline as manufacturing companies aim to reduce headcount ahead of economic uncertainty. However, current demand remains prominent as Order Backlog and Supplier Deliveries increase, paired with low inventories.
ISM Services PMI for February increased 0.7% and remains in expansionary territory. Most categories increased, with the exception being Imports and Business Activity. New Orders, Backlog and Inventories all moved higher due to an attempt to front run upcoming tariffs. (ISM PMI’s chart below)
Total nonfarm payrolls for February rose by 151k, slightly below the 12-month average of 168k. The largest sector increases were health care, finance, and transportation. Inline with recent headlines, federal government employment declined. The Unemployment Rate ticked slightly higher to 4.1% and average hourly earnings increased 0.3% month-over-month, or 4% year-over-year. Overtime hours for manufacturing also increased slightly to 2.9 hours. (Wage Growth v. Inflation chart below)
The Week Ahead:
- JOLTS (3/11)
- CPI (3/12)
- PPI (3/13)
- Michigan Sentiment Preliminary (3/14)
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