The U.S. February PMI composite index exceeds expectations with non-manufacturing PMI strengthening.

The data released by S&P Global on Wednesday showed that the United States' Purchasing Managers' Index (PMI) composite output index reached 51.6 in February, exceeding market expectations but still lower than January's 52.7. This index measures the overall performance of the service and manufacturing sectors, reflecting a slowdown in the expansion momentum of the US economy. At the same time, the Service PMI business activity index recorded 51.0, indicating that the industry is still growing, but at the slowest pace since November 2023. Chris Williamson, Chief Business Economist at S&P Global Market Intelligence, pointed out that companies have significantly lowered their expectations for future output due to growing concerns among service providers about slowing demand growth and uncertainty regarding new government policies, including tariffs, trade policies, and potential impacts of federal budget cuts. On the other hand, the latest data from the Institute for Supply Management (ISM) on the Non-Manufacturing Purchasing Managers' Index (PMI) showed an increase to 53.5, higher than the market's expected 52.5, and surpassing last month's 52.8. This data indicates an acceleration in the expansion pace of the non-manufacturing sector in the United States and is interpreted by the market as a positive signal for the US dollar. The ISM Non-Manufacturing PMI index is calculated based on a diffusion index of four sub-indicators, each given equal weight, including Business Activity, New Orders, Employment, and Supplier Deliveries. A PMI index above 50% indicates that the non-manufacturing sector is in an expansion phase, while below 50% indicates economic contraction. This survey by ISM covers over 370 purchasing and supply management executives, spanning 62 industries across nine major industries under standard industrial classification, and is broadly representative. These industries' contributions to the US Gross Domestic Product (GDP) are also considered in the data analysis. The better-than-expected growth in the Non-Manufacturing PMI is seen by the market as a sign that the fundamentals of the US economy remain strong, especially in key industries such as services, construction, and agriculture, which are continuing to expand. This data strengthens confidence in the US economic growth in the market.