Manufacturing activity in the US midwest expanded for the fourth month in a row in February, although at a slower pace than in January. The Chicago Purchasing Management Association said its index of regional business activity fell to 54.9 in February from 56.0 in January. This is the fourth straight month that the index has been above 50.0, the figure that divides expansion from contraction. Analysts had expected the index to drop to 52.5 in February.
Although manufacturing continued to show signs of recovery, companies continued to fire workers, the report indicated. The employment index rose to 46.6 in February from 45.6 in January, but remained below the key 50.0 level. New weekly jobless claims hit a new 2003 high last week, according to the Labour Department. Initial claims for unemployment benefits rose by 11,000 to 417,000 for the week ended 22 February, the highest level of initial claims since the week ended 14 December. The Chicago survey is seen as an indication of the national survey from the Institute for Supply Management, which is due for release on 3 March. //www.fxcentre.com