- The ISM Manufacturing and Services Indices registered 58.6% and 56.5%, respectively, in February
- The U.S. added 678,000 jobs in February
- The price of wheat futures contracts closed last week at a record $12.09 per bushel
Top Three Market Headlines
Business Activity Surveys Diverge in February: U.S. business activity expanded for the 21st straight month in February, according to surveys by the Institute for Supply Management (ISM). Notably, however, growth trends differed across the manufacturing and services sectors. Benefiting from continued strong demand, the ISM Manufacturing Index rose modestly to 58.6% in February (a reading above 50% indicates expansion of activity, while a sub-50% mark reflects contraction). On the other hand, the ISM Services index fell from 59.9% to 56.5%, its lowest level in 12 months, with survey respondents noting that supply chain constraints, rising costs, and labor shortages are pressuring growth rates.
Solid Jobs Gains Reported for February: The Labor Department reported last week that U.S. nonfarm payrolls grew by 678,000 in February, beating analysts' estimates. The number of job additions was the highest since July 2021, indicating that the pandemic's hold on the U.S. economy is weakening. Gains were broadly shared across various sectors, with the most new jobs—nearly a quarter of total additions—occurring in the leisure and hospitality sector. For the month, the jobless rate fell to 3.8% from 4.0% in February, while average hourly earnings increased 5.1% from the prior year.
Commodities Rebound Accelerates: The post-pandemic rebound in many commodities has picked up steam lately. Brent crude oil futures closed last week at $118 per barrel, their highest price since 2012, while the Bloomberg Industrial Metals index hit its highest level since 2008. Grain markets have particularly surged lately, with the price of wheat hitting all-time highs last week. Already benefiting from a supportive backdrop of rising demand and constrained supplies, certain commodity prices have seen a further boost in the aftermath of the UkraineRussia conflict, as Russia remains a critical exporter of energy products while both countries combined account for about 29% of global wheat exports.