A marginally slower rate of contraction is the best news in what are otherwise weak PMI flashes for January. Services rose 1.6 points from December to 46.6 while manufacturing rose 6 tenths to 46.8; both readings remain well below breakeven 50 to indicate that significantly more respondents are reporting month-over-month declines in composite volumes.

The biggest negative in the report, one tied to high costs for finished goods, is a sharp drop in manufacturing orders. This echoes last week's results from the Empire State and Philadelphia surveys. In contrast, contraction in new orders eased among service providers.

Input costs across both samples ticked higher to end a run of consistent moderation over the second half of last year. But a plus for future orders is that selling prices in the survey, which had been, have held steady so far this month. Another plus is strengthening in general business confidence to a four-month high. Employment between the two samples rose but only marginally.

The PMI's aren't often cited by policy makers but they are watched by forecasters who will be looking for another month of sub-50 scores for the ISM manufacturing and services reports to be posted in the first week of February. Yet today's results, however weak, were still better than expected and helped lift Econoday's Consensus Divergence to 19 to indicate that recent US economic data have been safely ahead of estimates.

The PMI's have been sinking deeper into contraction, and no relief is expected for January. Manufacturing is seen at 46.5 with services at 45.5.

The flash Composite Purchasing Managers' Index (PMI) provides an early estimate of current private sector output by combining information obtained from surveys of around 1,000 manufacturing and service sector companies. The flash data are released around 10 days ahead of the final report and are typically based upon around 85 percent of the full survey sample. The report tracks changes in variables such as new orders, stock levels, employment and prices across both manufacturing and services. Production is also tracked, defined as"production" for manufacturing and"output" for services. Results are synthesized into a single index which can range between zero and 100. A reading above (below) 50 signals rising (falling) output versus the previous month and the closer to 100 (zero) the faster output is growing (contracting). The report also contains flash estimates of the manufacturing and services PMIs. The data are produced by S&P Global.

Investors need to keep their fingers on the pulse of the economy because it dictates how various types of investments will perform. By tracking economic data such as the purchasing managers' manufacturing indexes, investors will know what the economic backdrop is for the various markets. The stock market likes to see healthy economic growth because that translates to higher corporate profits. The bond market prefers less rapid growth and is extremely sensitive to whether the economy is growing too quickly and causing potential inflationary pressures.