US factory activity edges up in Feb: Markit

New York

THE US manufacturing sector expanded in February at its fastest rate since November, after notching its lowest reading in a year in the prior month, an industry report showed on Friday.

Financial data firm Markit said its preliminary or "flash" US Manufacturing Purchasing Managers Index rose to 54.3 in February, up from January's final reading of 53.9. Economists polled by Reuters had expected a 53.6 reading, similar to the median forecast in a Bloomberg survey of 20 economists which called for 53.6, with estimates ranging from 53 to 55.1.

A reading above 50 signals expansion in economic activity.

"While still expanding at a solid pace, the US economy has entered a slower growth phase," Chris Williamson, chief economist at Markit, said in a statement.

This month's output sub-index rose to 56 from January's 55.7 final reading, its second straight monthly increase and best reading since October, while the employment sub-index dipped to 51.7 from last month's 53.4.

It was the slowest rate of factory employment growth since July, according to the report.

Input prices contracted for a second consecutive month.

Mr Williamson said: "Factory output growth ticked higher for a second successive month in February, suggesting the goods-producing sector is on course to make a robust contribution to the economy in the first quarter.

"However, the rate of growth remains well down on last year's peaks, and a slowing of new orders growth to the weakest for just over a year looks to have caused employers to take a more cautious approach to hiring. Worries over Russia and the eurozone also continue to dampen risk appetite."

The group's measure of factory orders fell to 54.7, the lowest since January 2014, from 55 the prior month. A gauge of employment declined.

A report published on Thursday showed that the number of Americans initially applying for unemployment fell back below the key 300,000 mark in the second week of February, showing a steadily improving job market.

The US Labor Department said that in the week ending Feb 14, the advance figure of seasonally adjusted initial claims for jobless benefits declined by 21,000 to 283,000, lower than economists' expectation of 293,000, the department said.

Meanwhile, the four-week moving average for new claims, a better measure of the underlying trend of labour market conditions, dropped 6,500 to 283,250, the lowest level since late October.

The advance figure of seasonally adjusted insured unemployment during the week ending on Feb 7 stood at 2.43 million, an increase of 58,000 from the previous week's revised level.

The US economy added 257,000 jobs in January, while the unemployment rate ticked up to 5.7 per cent from 5.6 per cent in December as more people returned to the labour force amid strong job gains, the Labor Department said earlier this month.

The Markit purchasers figure is based on responses from about 85 per cent to 90 per cent of companies in a poll of more than 600 American manufacturers. Reuters, Bloomberg, Xinhua