There was bad news for the US this afternoon, with the latest Institute for Supply Management (ISM) index showing a slowdown in business expansion in February. The ISM said its overall index of business activity fell to 50.5 in February from 53.9 in January. Despite the decline, this is the fourth straight month the index has been above 50. A reading above 50 indicates the manufacturing sector is expanding. The decline in the index was larger than expected. The consensus forecast was for the index to fall to 51.8 in February.
The index had reached a three-year high of 55.2 in December. In February, production remained strong, but there was a significant slowing in the rate of growth of new orders. "Supply managers are certainly being challenged by current conditions," said Norbert Ore, chair of the IMF business survey committee. He said that higher energy prices were squeezing thin margins and the threat of war was a major deterrent across the entire sector of industries. The threat of war "was pretty much across every industry. The threat of war is dampening demand," Ore said. //www.fxcentre.com/