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Economic Report: U.S. factories grow faster as omicron fades, ISM finds, but shortages still a drag

The numbers: The ISM barometer of American factories showed somewhat faster growth in February in a sign the economy partially rebounded after an omicron-induced lull toward the end of last year.

The increase in the manufacturing index, which fell to a 14-month low in January, was the first in four months.

Economists polled by The Wall Street Journal forecast the index to rise to 58% from 57.6% in January. Any number above 50% signifies growth. 

The report, compiled by the Institute for Supply Management, is seen as a mirror of the health of the U.S. economy.

Big picture: The receding wave of omicron cases and end of government restrictions is giving the economy a boost, but widespread shortages and high inflation are restraining growth.

Now the war in Ukraine threatens to exacerbate inflation in the short run owing to higher prices of oil and other key commodities. The conflict could also add further disruptions to global trade.

Market reaction: The Dow Jones Industrial Average
SPX,
-0.70%

DJIA,
-1.01%

and S&P 500
SPX,
-0.70%

declined in Tuesday trades. Stocks have fallen this year and have been under pressure for the past week because of the Russian invasion of Ukraine.

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