The U.S. economy gained steam in February as the huge fall in Covid-19 infections from the Omicron variant bolstered growth in the service sector.
Source: IHS Markit.
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The IHS Markit flash composite purchasing managers’ index, which tracks activity in both the manufacturing and services sectors, rose to 56.0 in February from 51.1 in January.
Both the manufacturing and services sectors posted stronger growth in output, with companies attributing the growth to significant gains in new business, employees returning to work from sick leave, increased traveling and availability of raw materials.
Chris Williamson, chief business economist at IHS Markit stated that the rate of economic growth improved significantly in February as Covid-19 containment measures were loosened.
Demand was reported to have recovered and supply chain challenges moderated compared to the prior month.
The flash U.S. services PMI increased to 56.7 from the prior month, topping the 52.25 consensus estimates from the economists surveyed by The Wall Street Journal.
Inflationary pressures across the private sector increased, with the pace of input price inflation quickening on increased raw material, transportation and wage costs.