US manufacturing activity spent a fourth consecutive month in expansion territory, helped along by an uptick on a key measure of demand.

That was the good news from the last of this week’s top-tier macro releases out of the world’s largest economy.

The bad news: A measure of input cost pressures surged again which, when set against a lackluster read on an employment metric, had stagflationary vibes.

The ISM manufacturing headline, at 52.7, undershot consensus but nevertheless marked another month above 50, suggesting the long-running US factory recession ended early this year.

There’s the chart. It’s been a long time coming — “it” being the recovery — and frankly, I’m not sure it’s here yet. This might be a false dawn.

Just 2% of manufacturing GDP is now in a “strong contraction,” defined as a sector composite of 45 or lower. That’s good.

But as ISM chair Susan Spence remarked, “In this second month of the Iran War, 31% of the comments were positive and 69% negative, with a positive to negative sentiment ratio of 1 to 2.2.” That’s bad.

Nearly every panelist anecdote mentioned the war, either explicitly or obliquely. Tariffs came up a lot too.

The price index, which soared to 78.3 in March after an even larger jump the prior month, rose again, hitting an eye-watering 84.6, the highest since the beginning of the war in Ukraine.

Note that the price gauge was 59 before the war started. It’s up nearly 26ppt in three months, suggesting we went from a place where price pressures were fairly common to one where they’re pervasive.

The employment index, meanwhile, dropped to just 46.4, the lowest this year. It’s only been above 50 six times since 2022.

“Among comments, the war was mentioned in 47% and tariffs in 18%,” Spence went on, in the color accompanying the release. “As was the case last month, some panelists referenced both topics within a single comment.”