ISM index still healthy
The Institute for Supply Management's index of manufacturing activity in February came in at levels that are solidly consistent with real economic growth of at least 3-4%. Since fourth quarter growth was only 1.6%, growth this quarter is likely to be 5% or better, resulting in an average for the two quarters of 3.5% or so. Export orders were also strong. The prices paid component of the index reflected the continuation of widespread pricing power, with almost two-thirds of respondents reporting paying higher prices.