Earlier this week, we were hit with yet another winter storm here outside of the Washington, D.C., area, and, true to form, many things came to a girding halt. We can add this to the other winter storms that have taken their toll on the economy in the current quarter, but as I shared with subscribers to my PowerTrend Profits investing newsletter, most of that will be temporary. As we have seen in the past, this slowdown likely will create a burst of pent-up demand once the warmer weather rolls around.
During my snowed-in time, I was fortunate enough to have some interesting reading. One key data point I gleaned was a very robust purchasing managers‚?? index (PMI) reading for the U.S. economy. The February reading from Markit Economics showed a significant month-over-month jump in output, new orders, backlogs and new export orders. All told, it was the strongest month for manufacturing since May 2010, despite the impact of the winter storms. I continue to see signs of pent-up demand in the short term that should give a boost to domestic manufacturing.
At the same time, the euro zone continues to recover as its pace of manufacturing has continued to expand, with February marking the eighth consecutive month of expansion for manufacturing output, new orders and new export business. An even broader view of global manufacturing offered by JP Morgan came in at a reading of 53.3, a 34-month record and higher than the 53.0 January figure. On that global basis, JP Morgan found that global output remained on track, but new order activity rose in February compared to January.
That tells me the global manufacturing economy is doing better than is being talked about by all the pundits and talking heads on TV.
Read more about what the winter weather and Warren Buffett can tell us about the direction of the economy at Eagle Daily Investor.
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