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ISM index rebounds with six-point gain in January to 55.2
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Orders measure matches highest since beginning of 2022
A gauge of US services snapped back in January after an end-of-2022 slump, suggesting a resurgence in consumer demand that leans against concerns of an imminent economic slowdown. The Institute for Supply Management’s non-manufacturing index rose 6 points to 55.2 in the largest monthly advance since mid-2020, data showed Friday. Readings above 50 signal growth and the January figure topped all estimates in a Bloomberg survey of economists.
The group’s gauge of new orders surged more than 15 points and a measure of business activity strengthened. Both indexes stand at 60.4, with the orders gauge matching the highest level since the start of 2022. Business activity, which parallels the ISM factory production gauge, jumped to the second-highest reading in a year. The figures show the pullback in consumer activity at the end of last year was likely more of a hiccup than the start of a sustained retrenchment in household demand. When paired with a shockingly strong January jobs report, the data indicate the labor market, cooler inflation and rising wages continue to support consumption, at least for now. “Although responses varied by industry and company, the majority of panelists indicated that business is trending in a positive direction,” Anthony Nieves, chair of the ISM Services Business Survey Committee, said in a statement. “Some companies still find it difficult to fill open positions, while others are facilitating staff reductions.” Ten industries reported growth last month, including agriculture, utilities, and management of companies and support services. Eight industries reported a decrease, led by transportation and warehousing. The report also showed a rebound in demand abroad, likely a reflection of China reopening its economy after three years of strict Covid-19 restrictions on activity. NN: The notion that the economy is slowing and inflation is moderating is nothing more then WallStreet (who is scared to death about the coming crash) desperate spin.