The Institute for Supply Management (ISM) Manufacturing PMI report for February came in below expectations, with a reading of 50.3, missing the estimated 50.7, while the manufacturing prices paid figure surged to 62.4, the highest level since June 2022.
ISM Manufacturing Business Survey committee chair Tim Fiore joins Catalysts to analyze what this reading indicates about the broader economy, focusing particularly on how Trump's tariffs on steel and aluminum have affected the data.
Fiore identifies tariffs as the primary concern, noting that the price index's 7.5-point increase during the month demonstrates that "a lot of companies have been impacted by steel and aluminum tariffs." He explains this has suppressed the new order rate as businesses avoid new commitments while they determine "who's going to pay for this."
Despite these challenges, Fiore states, "If you remove ... the one-time tariff issue with steel and aluminum, those numbers will probably recover."
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However, he expresses deeper concern about potential escalation, adding, "I really quiver to think of what would happen if the Mexico and Canada tariffs go into place in the next couple of days and what that would mean for the PMI for March."
To watch more expert insights and analysis on the latest market action, check out more Catalysts here.
This post was written by Angel Smith