| Actual | Previous | |
|---|---|---|
| Composite Index | 46.8 | 44.7 |
| Services Index | 46.8 | 45.0 |
Highlights
January's services PMI ends January at 46.8, up a scant 2 tenths from the mid-month flash and once again consistent with contraction for the sector. This index was been below breakeven 50 for the last seven months.
New orders, especially foreign orders, contracted in January as did backlogs. Respondents blamed high interest rates and inflation for the order weakness. Employment growth in the sample did rise but slowed from December's hiring pace. Input costs accelerated for the first time in eight months though selling prices rose at the slowest pace in more than two years.
The services PMI is contracting at just about the same pace as the manufacturing PMI which, in data reported Wednesday, ended January at 46.9. The composite PMI ends January at 46.8. Watch for the ISM services report at the top of the hour where marginal expansion at 50.4 is Econoday's consensus.
New orders, especially foreign orders, contracted in January as did backlogs. Respondents blamed high interest rates and inflation for the order weakness. Employment growth in the sample did rise but slowed from December's hiring pace. Input costs accelerated for the first time in eight months though selling prices rose at the slowest pace in more than two years.
The services PMI is contracting at just about the same pace as the manufacturing PMI which, in data reported Wednesday, ended January at 46.9. The composite PMI ends January at 46.8. Watch for the ISM services report at the top of the hour where marginal expansion at 50.4 is Econoday's consensus.
Definition
US Services Purchasing Managers' Index (PMI) is based on monthly questionnaire surveys collected from over 400 U.S. companies which provide a leading indication of what is happening in the private sector services economy. It is seasonally adjusted and is calculated from seven components, including New Business, Employment and Business Expectations.
Description
Investors need to keep their fingers on the pulse of the economy because it indicates how various types of investments will perform. The Markit Services PMI provides advance insight into the services sector, which gives investors a better understanding of business conditions and valuable information about the economic backdrop of various markets. The stock market likes to see healthy economic growth which generally 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. The PMI data are also used by many Central Banks to help make interest rate decisions.
The IHS Markit Services Flash data give a detailed look at the services sector, the pace of growth and the direction of this sector. Since the service sector accounts for more than three-quarters of U.S. GDP, this report has a significant influence on the markets. In addition, its sub-indexes provide a picture of new business, employment, business expectations and prices.
The IHS Markit Services Flash data give a detailed look at the services sector, the pace of growth and the direction of this sector. Since the service sector accounts for more than three-quarters of U.S. GDP, this report has a significant influence on the markets. In addition, its sub-indexes provide a picture of new business, employment, business expectations and prices.
