US ISM manufacturing: Deceleration but still expanding at a solid clip - Wells Fargo

Analysts from Wells Fargo, point out that today’s ISM manufacturing report showed the sector cooling a touch but still expanding at a solid pace. 

Key Quotes: 

“Consistent with many of the regional purchasing managers indices released over the past few weeks, growth in the manufacturing sector looks to have cooled a touch last month. The ISM manufacturing index edged back half a point to 57.2 in March. At that level, however, the factory sector is still expanding at a solid clip.”

“The largest drag on the headline this month was a pullback in current activity. The production index edged back 5.3 points and is now slightly below its six-month average. The pipeline for activity, however, remains strong. New orders were little changed at 64.5 and remain near a three-year high.”

“Price pressures continue to mount in the factory sector. Lower oil prices in the second half of the month do not appear to have been passed on to manufacturers, who reported no commodities down in price in March. The prices paid index rose to 70.5, which is the fastest rise in input prices in nearly six years and supports our outlook for inflation to rise further over the course of the year.”