Currency sentiment: USD - Bearish, USD - Neutral
Reference time frame: Short-term
The recently released economic data for the US painted a mixed picture of the economy. The ISM Manufacturing PMI came in below expectations at 47.8, indicating a contraction in the manufacturing sector. Additionally, the ISM Manufacturing Employment figure fell to 45.9, further highlighting weakness in the labor market. Consumer sentiment, as measured by the Michigan Consumer Sentiment index, also declined to 76.9, suggesting a potential decrease in consumer spending.
On the inflation front, the Michigan 1-Year Inflation Expectations matched forecasts at 3.0%, while the 5-Year Inflation Expectations remained steady at 2.9%. This suggests that consumers and investors are anticipating higher inflation in the short term.
The Construction Spending data for January showed a decrease of 0.2%, missing expectations of a 0.2% increase. This could indicate a slowdown in construction activity, which is a key driver of economic growth.
Overall, the recent data releases point to a mixed economic outlook for the US. The weakening manufacturing sector and consumer sentiment are concerning, while inflation expectations remain stable. The upcoming months will be crucial in determining whether these trends persist or if there will be a turnaround in economic activity.