MNI BRIEF: US Factory Prices On The Rise Again - ISM
MNI (WASHINGTON) - U.S. manufacturing in February expanded for the second consecutive month but growth is already struggling under President Donald Trump's tariff threats and policies, ISM survey chair Timothy Fiore said Monday, stressing that renewed price pressures are no blip.
"Overall, demand is slow due to tariff uncertainty. Output is stable. Staff reductions continue, and inputs gained driven by tariffs. The manufacturing economy appears to be struggling due to the tariff uncertainty," Fiore told reporters on a conference call. The ISM manufacturing composite in February decreased 0.6pp to 50.3, slightly below market expectations.
He said the sluggish growth in February "might be a blip," temporarily hitting new orders, but the price increases are not a blip. The ISM manufacturing prices measure jumped 7.5ppts to 62.4 in February, the largest month-over-month increase in a year. "This kind of number would indicate to me that the CPI and the PPI may not be what people want it to be," he said. "Most likely the CPI and PPI are going to go up."
On the input side, supplier deliveries increased 3.6ppts to 54.5 and inventories jumped 4.0ppts to 49.9. If those two indicators had "been stable from the prior performance, we'd be sitting at a 48 and some change for the PMI" and not 50.3 in February. "This could be a one month blip, but you can see that there's anxiety in the community because there's disagreements about who's going to pay for" these tariffs, Fiore said.