A report from the Institute for Supply Management (ISM) revealed on Friday its index of manufacturing activity came in at 54.2 percent last month, down 2.4 percentage points from the unrevised January figure of 56.6 percent, missing economists' forecast for a 55.5 percent reading. 

A reading above 50 percent indicates expansion, while a reading below 50 percent indicates contraction. 

The monthly drop by the headline index was primarily attributable to slower increases in the production index (-5.7 percentage points m-o-m to 54.8 percent in February), the employment index (-3.2 percentage point m-o-m to 52.3 percent), the new orders index (-2.7 percentage points m-o-m to 55.5 percent) and the supplier deliveries index (-1.3 percentage points m-o-m to 54.9 percent) . 

Timothy R. Fiore, Chair of the ISM Manufacturing Business Survey Committee said, “The past relationship between the PMI and the overall economy indicates that the PMI for February (54.2 percent) corresponds to a 3.3-percent increase in real gross domestic product (GDP) on an annualized basis."