US February ISM manufacturing 50.3 vs 50.8 expected

• Prior was 50.9
• Prices paid 62.4 vs 55.8 expected (prior 54.9)
• Employment 47.6 vs 50.3 prior
• New orders 48.6 vs 55.1 prior (sharpest drop since 2022)
• Production 50.7 vs 52.5 prior
• Imports 52.6 vs 51.1 prior

This isn’t a great report but it’s above 50 for the second month. Prices paid are the highest since June 2022.

The commentary in the S&P Global survey of manufacturing highlighted higher output in order to front-run tariffs but increasing uncertainty.

• “The tariff environment regarding products from Mexico and Canada
  has created uncertainty and volatility among our customers and increased
  our exposure to retaliatory measures from these countries.” [Chemical
  Products]
• “Customers are pausing on new orders as a result of uncertainty
  regarding tariffs. There is no clear direction from the administration
  on how they will be implemented, so it’s harder to project how they will
  affect business.” [Transportation Equipment]
• “Tariff impact has been minimal to overall manufacturing and raw
  material supply. Limits on U.S. government spending in key organizations
  like the Food and Drug Administration, Environmental Protection Agency
  and National Institutes of Health are delaying some orders.” [Computer
  & Electronic Products]
• “Inflation and pricing pressure continue to drive uncertainty in our
  2025 outlook. We are seeing volume impacts due to pricing, with
  customers buying less and looking for substitution options.” [Food,
  Beverage & Tobacco Products]
• “The incoming tariffs are causing our products to increase in price.
  Sweeping price increases are incoming from suppliers. Most are noting
  increases in labor costs. Vendors are indicating open capacity.
  Inflationary pressures are a concern. Our company is working diligently
  to see how the new tariffs will affect our business.” [Machinery]
• “Business is still slow, but some indications of improved demand are
  six to nine months out. Steel and scrap costs are increasing, and it’s
  too early to tell how high they will go.” [Fabricated Metal Products]
• “New orders continue to be strong after picking up in December. The
  uncertainty about tariffs keeps us cautious on spending, despite the
  strong sales right now.” [Electrical Equipment, Appliances &
  Components]
• “Management now has us running scenarios to project tariff impacts
  to our business. They want numbers in 24 hours on variables that equate
  to a wild guess. Interesting times we live in.” [Nonmetallic Mineral
  Products]
• “Internal analysis ongoing about impact of tariffs, but nothing
  concrete yet. General business conditions remain tepid; outlook on the
  durables side growing more pessimistic with growing domestic inventories
  of automobiles.” [Plastics & Rubber Products]
• “Customer volumes seem to be better than 2024. However, customers
  are still very hesitant to commit to long-term volumes due to the market
  uncertainty caused by proposed tariffs on steel/aluminum imports.”
  [Primary Metals]

USD/JPY is under some pressure following the ISM number, down about 20 pips since the release.

This article was written by Adam Button at www.forexlive.com.