US ISM Services PMI marked a significant uptick from 50.6 to 53.4 in January, above expectation of 52.1. This highlights a strengthening in the services sector
A closer look at the index components reveals stable business activity level, with the production sub-index holding steady at 55.8. New orders rose from 52.8 to 55.0, indicating growing demand for services.
A remarkable aspect of this month’s report is the sharp rebound in employment, which soared from 43.8 to 50.5, signaling a return to expansion territory. This significant leap, the largest month-over-month increase since January 2021. Comments from respondents include: “Ramping up head count as projects come on line” and “Highly competitive market due to salary, demand and turnover.”
Inflationary pressures within the sector also intensified, with the prices index jumping from 56.7 to 64.0, marking the most considerable month-over-month increase since August 2012.
Historically, January’s reading of 53.4% is indicative of 1.5% annualized growth in real GDP.
Full ISM services release here.
