Strong US Economic Growth Continues in February
- Strongest monthly rise in business activity in 12 months
- Business Confidence rises to 7 month high
- Price rises firm up and payrolls continue to increase
The Sales Managers Index reflected further rapid expansion in the US economy in February, registering a value of 59.6, an increase of 1.1 percentage points when compared to January’s reading of 58.5 percent. A reading above 50 percent indicates that the economic activity is generally expanding; below 50 percent indicates that it is generally contracting.
SMI data for February suggests that the rate of GDP growth for the month will be fractionally up from the buoyant levels seen in Q4 2014 which were reported as 2.6% year on year in the first estimate by the Bureau of Economic Analysis on January, 30th.
The Sales Managers’ Index is the first monthly economic activity index released covering all private sectors of the US economy. Sector analysis shows that the February Manufacturing SMI registered 60.3, an increase of 0.2 when compared to January’s reading of 60.1 and the Services SMI registered 59.7, up by 1.1 on January’s index value of 58.6. These index values show strong economic growth has continued into February across the economy with both sectors picking up pace.
Robust business conditions across both primary sectors of the US economy have underpinned the confidence of the panellists. The Business Confidence Index rose by 1.5 to register a very high value of 68.9 in February, the fourth successive monthly rise. This indicates that most panellists in the US remain very confident about business conditions in the coming months. Panellists’ rising optimism appears to be grounded in a strong growth in sales. The Market Growth Index, which reflects growth of the general marketplace in panellists’ own industry sectors, registered a very strong value of 62.0 in February, up by 2.2 on January.
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The January Product Sales Index registered a value of 55.8, up by 1.7 on the month before and the second rise in value since August 2014. The turnaround in the rate of growth of markets and company sales has allowed panellists to firm prices. As a result the Prices Charged Index rose by 0.9 to record a value of 56.2 in February, the third monthly increase. Prices have continued to rise through last year, but the rate of increase slowed in the last quarter with three successive falls in the value of the Index.
Continuing strong economic activity has resulted in rising levels of employment. The Staffing Levels Index, which reflects the number of staff taken on compared to the same period in the last year, recorded a high value of 55.0 in February reflecting a rapid and consistent rise in payrolls across the US.
World Economics Chief Executive Ed Jones commented on the release:
“The Headline SMI Index for the US economy in January is showing continuing steady growth in economic activity. Both the Manufacturing and Services Sectors reflect expanding economic activity with prices firming and payrolls continue to rise.”