U.S. January ISM Services - Bounce from weak December
January’s ISM services index of 53.4 is the strongest since September after a December index of 50.5 that was the weakest since May. The December and January average is lower than November’s 52.5 so there is no clear trend.
December’s weakness was most pronounced in employment which came in clearly negative at 43.8. January’s employment index of 50.5 is significantly higher, but still only modestly positive and much less impressive than January’s non-farm payroll.
Business activity was unchanged at 55.8 and new orders at 55.0 from 52.8 saw only a modest rise. Deliveries at 52.4 from 49.5 saw a surprisingly strong bounce to complete the breakdown of the composite.
Prices paid do not contribute to the composite and at 64.0 from 56.7 saw a surprisingly strong bounce to the highest level since February. This with the rise in delivery times hints at some increase in inflationary pressure though we would not draw strong conclusions from one month’s data.