The marquee gauge of US factory activity printed well ahead of estimates on Thursday, suggesting an imminent end to a 15-month malaise.

At 49.1, the headline ISM manufacturing index now sits at its best level since October of 2022, even as January marked another month below the 50 demarcation line that separates expansion from contraction.

Consensus expected 47.2 from the headline. The range of estimates, from more than five-dozen economists, was 43 to 49.5.

The final read on S&P Global’s gauge of factory activity in the US was 50.7, up from the flash reading and the best overall showing since September of 2022.

“Manufacturers have started the year with a spring in their step,” Chris Williamson, Chief Business Economist at S&P Global Market Intelligence, said, citing the highest business optimism in nearly two years, which he attributed to a marked improvement in new orders tied to household demand for consumer goods amid “signs of an easing in inflation and looser financial conditions.”

In the ISM survey, the new orders gauge jumped to 52.5 from 47, while the production index likewise moved into expansion at 50.4 from 49.9 in December.

“Two of the six biggest manufacturing industries (Transportation Equipment and Chemical Products) registered growth in January,” ISM’s Tim Fiore remarked, adding that although demand’s still soft, it’s exhibiting “signs of improvement,” while “production execution is stable [and] companies continue to manage outputs, material inputs and labor costs.”

Of course, with improving demand comes price pressures, exacerbated, perhaps, by friction in supply chains in a world where geopolitical developments are everywhere and always foreboding.

As the figure shows, the prices paid gauge in the ISM release moved sharply higher to 52.9 in January from 45.2 the prior month.

S&P Global’s Williamson summed it up. “The brighter news is tempered by signs of factory costs rising on the back of supply delays, with costlier deliveries often linked to adverse weather and recent disruptions to global shipping,” he said. “These higher costs are feeding through to increased prices charged for goods by factories, which rose in January at the fastest pace since last April.”

As Jerome Powell suggested during Wednesday’s press conference, the tailwind from falling goods prices is likely to wane going forward, making the proverbial “last mile” in the fight to rein in overall price growth contingent on a more decisive moderation in services inflation. Not the easiest ask in the world.