The US manufacturing sector is showing robust growth, supporting the rise of the dollar

February 2, 2021

by JustForex

At the beginning of the year, the US output growth remained robust. The Institute for Supply Management’s manufacturing activity indicator fell to 58.7 in January from 60.5 a month earlier, according to data released on Monday. The raw material price index in the sector showed the highest value since April 2011.

The data point to the 8th consecutive month of strong growth in manufacturing activity. The slowdown was observed in new orders (61.1 versus 67.5), manufacturing (60.7 versus 64.7), shipping (68.2 versus 67.7), and new export orders (54.9 versus 59.1). On the other hand, indicators such as employment (52.6 versus 51.7) and order volume (59.7 versus 59.1) grew faster, as did price pressure (82.1 versus 77.6). Manufacturing performed well, with demand and consumption showing significant growth compared to December. “Labor market pressures for the surveyed companies and their suppliers will continue to constrain sector growth until the crisis caused by the pandemic subsides,” the ISM said in a statement.

The growth in the manufacturing employment indicator of the last month is the strongest since June 2019. This is a positive sign ahead of Friday’s January employment report, which is expected to show modest gains, largely supported by manufacturing hires.

In consequence of a good ISM report, the stock market sales have stopped. American Treasuries approached the 1.10% mark. S&P 500 futures added 0.8% with the opening of trading in Europe, following the January highs since yesterday.

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Important events:
  • – RBA Interest Rate Decision (Jan) at 05:30 (GMT+2);
  • – Eurozone GDP (q/q) (q4) at 12:00 (GMT+2).

by JustForex

 

This article reflects a personal opinion and should not be interpreted as an investment advice, and/or offer, and/or a persistent request for carrying out financial transactions, and/or a guarantee, and/or a forecast of future events.