U.S. Services Sector Activity Quickens to an Almost Two-Year High in January – ISM
U.S. services activity expanded in January at a faster pace than in the previous month, signaling that the sector remained resilient despite bearing the brunt of recent Covid-19 restrictions.
The ISM Services Report on Business PMI for January increased to 58.7 from a revised 57.7 in December, data from a survey compiled by the Institute for Supply Management showed Wednesday. Economists polled by The Wall Street Journal expected the reading to come in at 57.0.
The reading is over the 50 point break-even point that separates expansion over contraction, posting the eighth straight month of growth and reaching the highest level since February 2019.
“Respondents’ comments are more optimistic about business conditions and the economy,” said Anthony Nieves, chair of the ISM Services Business Survey Committee.
However, various local and state-level Covid-19 restrictions continue to negatively affect companies and industries, while production capacity and logistics issues continue to cause supply chain challenges, he said.
In January, the ISM services business activity index fell to 59.9 from 60.5 in December. The new orders index increased to 61.8 from 58.6 the prior month.
The employment index swung to expansion territory, posting 55.2 from 48.7 the month before, and the prices index retreated marginally to 64.2 from 64.4 in December.
The ISM services PMI also signaled that the U.S. overall economic activity continued to grow in January, as a reading above 48.5 over time generally indicates an expansion of the overall economy. This is the eighth straight month in which the PMI indicates such expansion.
Source: Dow Jones