Bloomberg U.S. Economy: Manufacturing Still Slumped in February

March 2 (Bloomberg) -- The recession in U.S. manufacturing persisted for a 13th month in February as sales dropped worldwide and factories cut jobs at the fastest pace on record.

The Institute for Supply Management’s factory index was 35.8, compared with 35.6 in January. Readings less than 50 signal a contraction. Other reports showed consumer spending rose in January with a spurt of post-holiday discounts, and construction dropped more than twice as much as anticipated.

Stocks fell worldwide on the souring outlook for global growth and the dollar and Treasuries advanced as investors sought a haven from financial turmoil. Manufacturing is likely to keep shrinking as households cut spending in coming months after the worst decline in U.S. employment since the end of World War II, analysts said.

“We are still deep in recessionary levels,” said Sam Bullard, an economist at Wachovia Corp. in Charlotte, North Carolina, who had the closest forecast for the ISM index in a survey by Bloomberg News. “Chances are we aren’t going to see any significant improvement in consumer spending any time soon.” more...