- Brett Ryan, an economist with Deutsche Bank Securities Inc.
Fourth quarter's GDP report raised concerns about the chosen course by the Federal Reserve. Moreover, analysts have expressed their concerns that first quarter's growth can be even slower, just around 2%.
Monday's set of data, however, increased possibility that recent economic weakness was just a cause of extreme weather conditions, hence, will be short-lived. According to the Institute for Supply Management manufacturing index climbed to 53.2 last month accelerating from 51.3 in January and beating market's estimations for a 52.3 reading. Moreover, the gauge move further away from the 50 threshold, signalling sector's expansion. January's disappointing reading marked the most steep decline for the indicator since May 2011, as purchasing managers all over America were citing the severe weather conditions as the main factor that slowed output. A pickup in the number of orders is suggesting businesses are getting more confident about future prospects.
A separate report showed that consumer spending inched higher more than excepted in the first month of 2014, reflecting the biggest gain in services in over 12 years, as American households began to enroll for health insurance. Spending advanced 0.4% over the period, also bolstering the case of stronger Q1 growth.
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