NAPM Index Drops, But Shows Growth; Inflation Pressure Builds

A key barometer of the health of the U.S. manufacturing economy edged down in January, but prices paid by factories continued to rise, igniting fears of an interest rate hike in the near future. The National Assn. of Purchasing Management (NAPM) economic index fell to 56.3 in January, from 56.8 in December. The January figure was near what was forecast by economists. January marked the 12th consecutive month that the NAPM index has been above 50, the level which indicates the nation's manufacturing sector is growing. The NAPM said the manufacturing index's price component, which measures how much producers pay for materials, rose sharply to 72.6 in January, up from 65.7 in December, suggesting that inflation pressures at the manufacturing level are continuing to build.