U.S. manufacturing activity rebounded in February, and although price pressures rose, the Institute for Supply Management said today.

In other economic news, the personal income of Americans climbed at double the rate of their spending in January, while a key gauge of inflation crept higher and U.S. construction spending fell 0.8% in January, dragged lower by the housing sector.

The ISM said that its manufacturing index for February moved to 52.3, from 49.3 in January and 51.4 in December. Readings over 50 indicate growth/

“February proved to be a good month in the manufacturing sector as new orders, production and employment contributed to a solid growth scenario,” said Norbert Ore, who directs the survey for the ISM. “The trend in manufacturing, as well as the overall economy, is for slow but continuing growth,” he added.

In its report, ISM also noted that inflation pressures moved to a five-month high, with the prices index rising to 59.0, from 53.0 the month before. The price index was at 47.5 in December.

Meanwhile, a price index for personal consumption expenditures, excluding food and energy, grew 0.3% in January, after a 0.1% increase in December. Compared with a year earlier, the price index for personal consumption expenditures minus food and energy increased 2.3% in January. The year-to-year climb in December for this core inflation gauge was 2.2%.

The Federal Reserve watches the core PCE price index closely for signs of problematic inflation. The central bank’s so-called comfort zone is considered to be 1.0% to 2.0%.

Personal income increased at a seasonally adjusted rate of 1.0%, after rising an unrevised 0.5% in December, the U.S. Commerce Department said today. Boosting income last month were gains on the exercise of stock options, bonus payments, and pay raises for military personnel. Excluding special factors, income rose 0.4%.

January personal consumption grew 0.5%, after increasing an unrevised 0.7% the month before.

Commerce reported that personal saving as a percentage of disposable personal income was negative 1.2% in January, marking the 22nd straight month the savings yardstick has showed red. It was negative 1.4% in December.

Separately, Commerce reported that U.S. construction spending fell much more than expected in January, dragged lower by the housing sector, but outlays the previous month were revised higher.

Total spending decreased by 0.8% at a seasonally adjusted annual rate of US$1.180 trillion, the Commerce Dept. said today. Spending climbed 0.6% in December; originally, December spending was seen 0.4% lower.

In other economic news, the number of U.S. workers filing new claims for unemployment benefits rose unexpectedly last week.

New jobless claims rose by 7,000 to a seasonally adjusted 338,000 in the week ended Feb. 24, the U.S. Labor Department said today.