Surprise! I’m surprised anyway.

Activity across the US manufacturing sector managed to expand for a second consecutive month, according to the first of this week’s top-tier macro releases from the world’s largest economy.

The ISM headline printed a relatively decent 52.4 for February. Consensus was 51.5, which is to say economists were more optimistic than I was that January’s expansion-territory read on the marquee measure wasn’t a one-off.

There’s the chart. The last time the ISM factory headline printed above 50 in back-to-back months was January and February of last year.

That may point to the same seasonality I keep referencing while warning against reading too much into ostensibly warm US macro releases. Post-pandemic, the data has a tendency to overshoot early in the year, creating a false “reheat” optic, only to retrace later.

The standout from Monday’s release was undoubtedly the price gauge, which soared almost 12ppt month-to-month, the largest sequential increase since March of 2020.

As the figure shows, 70.5’s a multi-year high and it’s a bad omen for inflation, again with the caveat that we could be picking up a seasonal distortion.

Consensus for the prices readout was 60. So 70.5 counts as an enormous overshoot.

On the bright side, the employment measure was the highest in over a year at 48.8, albeit still in contraction territory, where it’s been stuck since late-summer of 2023.

The color accompanying the release blamed the red-hot prices gauge on steel and aluminum which “impact the entire value chain, as well as tariffs applied to many imported goods.”