The numbers: American manufacturers grew in February at the fastest pace since the onset of the pandemic and business leaders are increasingly optimistic about the economy, a closely followed survey showed.
The Institute for Supply Management said its manufacturing index rose to 60.8% last month from 58.7% in January and matched a two-year high.
Economists surveyed by Dow Jones and The Wall Street Journal had forecast the ISM index to total 58.9%.
Readings over 50% indicate growth, and anything over 55% is considered exceptional.
See: A visual look at how an unfair pandemic has reshaped work and home
Big picture: Manufacturers have led the economic recovery and production has returned close to normal.
Businesses are even more optimistic about the next year. Production is increasing in anticipation of strong sales as the vaccines do their work and more government stimulus is pumped into the economy. The Biden administration is on the verge of passing another federal aid package that could total close to $2 trillion.
Read: The economy is heating up again
The biggest worry/? A shortage of certain key materials such as semiconductors that are pushing prices higher and in some cases constraining production. That could lead to higher prices for some goods and an increase in inflation.
Read: Inflation worries are back. Should you worry?
Market reaction: The Dow Jones Industrial Average
DJIA,
+2.07%
and S&P 500
SPX,
+1.98%
extended gains in Monday trades.
