Business activity in the U.S. leapt forward in the second month of the year at the fastest pace in more than two decades as manufacturing continues to drive the economic recovery, according to Bloomberg. On Monday, the Institute for Supply Management reported that its business barometer jumped to 71.2 in February from 68.8 the previous month, marking the highest level for the index since July 1988. The strong reading surprised economists expecting the gauge to fall to 67.5 this month.
The report was seen as “encouraging” by David Resler of Nomura Securities, who said, “The manufacturing sector was been one of the most vibrant segments of the economic in recent months.” A separate report from the National Association of Business Economics showed that its panel of 47 economic forecasters put the U.S. deficit as the top concern for the economy, and projected that the federal deficit would rise to $1.4 trillion in 2011, which is higher than previously forecast, adds Reuters. However, the group forecast for an upwardly revised 3.3% growth this year, and said that the Federal Reserve’s asset purchases would be unlikely to stoke inflation.
Click here to read the story on business activity from Bloomberg.