S&P Global announced on the 24th that the preliminary Purchasing Managers Index (PMI) for January, which combines the US manufacturing and service industries, was the highest in seven months. Order growth has become more robust, giving companies more confidence in the demand outlook.
Key Point
- Composite PMI preliminary value rose to 52.3
- The median forecast by economists is 51.
- Last month was 50.9
- Manufacturing PMI rose to 50.3 (47.9 in the previous month)
- Service industry PMI rose to 52.9 (51.4 in the previous month)
- An index of 50 indicates the boundary between expansion and contraction of activity.
The index showing expected production over the next year rose to the highest level since May 2022. This was supported by strong domestic demand.
US Composite PMI (seasonally adjusted)
Source: S&P Global
Chris Williamson, chief business economist at S&P Global Market Intelligence, said: “There is hope that inflation will fall in 2024, ease pressure on the cost of living, and provide a path to lower interest rates.” “Confidence has been supported,” he said in a statement.
The sales price index recorded its slowest growth since May 2020, a welcome sign for the U.S. Federal Reserve. The service industry was depressed.
“Companies report that selling price inflation is now below the pre-pandemic average, with prices rising at the slowest pace since the coronavirus pandemic-related lockdowns, and consumer spending “This is consistent with the view that consumer price inflation will remain below the authorities’ 2% target,” Williamson said.
On the other hand, the sales price index for the manufacturing industry rose to the highest level since April last year. Progress has been made in passing on increases in transportation and fuel costs.
Delivery time
Manufacturers also cited delivery delays due to transportation disruptions and cold weather. Supplier delivery times have increased for the first time in about a year, making it the longest since October 2022.
Composite PMI new orders showed strong growth for the first time in seven months. The manufacturing industry drove the growth, reaching the highest level since May 2022.
On the other hand, employment growth has slowed. Respondents indicated that finding skilled workers remains difficult due to labor shortages.
Original title:US Business Activity Expands at Fastest Pace in Seven Months(excerpt)
2024-01-24 16:22:00
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