March 2, 2016 Reading Time: 2 minutes

After a nervous couple of weeks, this week’s new economic data look more upbeat, and the stock market appears to be rejoicing a bit as well.

Our senior research fellow, Bob Hughes, points to new data on manufacturing, which he said show that sector contracted more slowly in February than it had in January. At 49.5, the ISM Manufacturing Index is still below the neutral threshold of 50, but it’s up from January’s 48.2, Hughes noted.

There were some encouraging details from that report, he said: New orders continued their current trajectory of expansion, and domestic orders, as well as production, both appeared to strengthen a bit. Employment in the manufacturing sector appeared to be contracting less than January, he said.

Meanwhile, ADP released its payroll report this morning. It estimated private employers hired 214,000 people in February, which Hughes said is a good number, and bodes well for the government jobs report on Friday.

Finally, the Census Bureau released its construction spending report on Tuesday. It’s a comprehensive look at all kinds of construction, public and private. Altogether, this sector saw an increase of 1.5 percent in January, following a 0.6 percent increase in December, according to the report. The public sector led the way in this report, although private construction saw a modest gain as well.

Hughes said the positive tone of all this data has helped the recent string of upward runs in the stock market. The S&P 500 is up about 9 percent from its February 11 low, although it’s still off 3.3 percent from where it was at this point last year.

Hughes said the positive tone helps, given that the ebb and flow of data in recent months has created an undercurrent of anxiety in the ongoing economic expansion.

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Aaron Nathans

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