Survey: U.S. manufacturing activity continues to contract

For those looking for more signs that January's economic rebound extended into February, a closely watched manufacturing survey showed activity continuing to contract, though at a slower pace.

• There were also some early signs of rebounding demand — and hope that this demand would accelerate later this year.

Details: Overall, the Institute for Supply Management's Purchasing Managers' Index remained in territory that suggests contracting output (47.7%) — only a marginal improvement from January's level (47.4%).

Between the lines: America's factories saw increased demand, with the new orders index jumping by 4.5 percentage points (though it remains in contraction). A smaller share of industries reported that activity was contracting at a strong pace; meanwhile, prices increased at a faster rate.

• Yet manufacturing employment did cool relative to January, at least according to the survey. A sub-index that gauges hiring activity dipped into contraction territory (49.1%), following two months of expansion.

What they're saying: Manufacturers "continue to indicate that they will not substantially reduce head counts, as sentiment is positive about the second half of the year, though slightly less so compared to January," ISM's Timothy Fiore said in a release. (A final reading of manufacturing activity in February by S&P Global released today showed employment improving for the month.)

What's next: ISM will release results for February data for the services sector, which accounts for a far larger share of the U.S. economy than manufacturing, on Friday.