- The ISM Manufacturing Index registered 47.7% in February
- The Consumer Confidence Index fell from 106.0 to 102.9 in February
- Home prices in the U.S. fell 0.5% in December from the prior month
Top Three Market Headlines
Manufacturing Activity Contracts Again: Business activity in the manufacturing sector slowed again in February, according to surveys of executives by the Institute for Supply Management (ISM). The ISM Manufacturing Index registered 47.7% on the month, up marginally from January's reading of 47.4% but still below the 50% threshold that distinguishes expansion of activity (>50%) from contraction. This was the fourth straight sub-50% reading for the manufacturing sector. In contrast, conditions in the services sector continued to improve, as the ISM Services Index, at 55.1%, surpassed 50% for the second consecutive month.
Consumer Confidence Weakens: U.S. consumers' outlook deteriorated for the second straight month in February, according to the latest Consumer Confidence Index report issued by the Conference Board, a private research group. The index fell from 106.0 in January to 102.9 in February, as consumers expressed more pessimism about jobs, income, and business conditions over the next six months. In addition, survey results indicated that consumers are scaling back plans to purchase large-ticket items like cars and appliances.
Home Prices Continue Retreating: With rising mortgage rates taking the steam out of the housing market, home prices continued cooling as 2022 came to a close. It was reported last week that the S&P CoreLogic Case-Shiller 20-City Composite Home Price Index, which measures average home prices in major U.S. metropolitan areas, fell 0.5% in December from the prior month; this was the sixth straight month of declining prices. Compared to the prior year, the index was up only 4.6% in December, significantly less than the 20%+ pace of growth seen as recently as the spring of 2022.