U.S. Manufacturing Slump Continues, But Signs of Stabilization Emerge

• U.S. manufacturing activity contracted further in February, with employment falling to a 7-month low • However, there were signs of improving demand, with customer inventories declining and manufacturers' comments increasingly upbeat • The ISM Purchasing Managers Index fell to 47.8, remaining below the 50 threshold indicating contraction for the 16th straight month • Eight manufacturing industries reported growth in February, while seven contracted • Factory employment continued declining, but this measure has not predicted government payroll figures well recently