The numbers: The U.S. economy accelerated in February as the record surge in omicron cases waned and restrictions on business were lifted, according to pair of IHS Markit surveys of business executives.
A “flash” index of service-oriented companies jumped to 57.5 this month from an 18-month low of 51.1 in the first month of 2022, IHS Markit said. A similar gauge of manufacturers rose to 52.5 in February from 50.5.
The flash IHS surveys offer the first broad look at the performance of the U.S. economy in each month. Any reading above 50 means businesses are growing and numbers above 55% are quite healthy.
Big picture: The economy suffered a blow as omicron exploded across the country, but the virus is receding now and governments are dropping restrictions on business such as vaccine mandates. That’s giving a lift to the economy.
Yet high inflation, abetted by persistent labor and supply shortages, is still a drag on the economy. And the Russian invasion of eastern Ukraine could add to the trouble by pushing oil prices higher.
Looking ahead: “The pace of economic growth accelerated sharply in February as virus containment measures, tightened to fight the Omicron wave, were scaled back,” said Chris Williamson, chief business economist at IHS Markit.
“Demand was reported to have revived and supply constraints, both in terms of component availability and staff shortages, moderated.”
Market reaction: The Dow Jones Industrial Average
and S&P 500
fell sharply in Tuesday trades after Russia invaded part of eastern Ukraine.