Preliminary
data released by S&P Global on Friday revealed that U.S. private sector
business activity grew again in early January 2025, albeit at a slower
pace than in the previous eight months.
According to
the report, S&P Global flash U.S. Composite Purchasing Manager's Index
(PMI) Output Index came in at 52.46 early this month, down from 55.4 in December
2024. The latest reading signalled further growth of business activity in January, albeit
at the softest pace since April 2024.
A reading above
50 signals an expansion in activity, while a reading below this level signals a
shrinkage.
S&P Global
flash services PMI checked in at 52.8 in January, down from 56.8 in December. The latest reading pointed
to the weakest increase in activity across the services sector in nine months. Economists had expected the services
PMI to slip to 56.5.
Meanwhile, S&P
Global flash manufacturing PMI increased to 50.1 in January from 49.4 in the
previous month. The latest print indicated a return to expansion in the manufacturing sector for the first time in six months. Economists had anticipated the manufacturing PMI to increase to 49.7.
S&P Global
noted that demand conditions varied - inflows of new business into the
service sector waning to a three-month, and new orders at manufacturers rose for the
first time in seven months. Employment rose in January at the fastest rate for
two-and-a-half years, driven by a surge in service sector hiring, where jobs
were added at the strongest rate for 30 months, though manufacturing payroll
growth also improved to a six-month high. On the price front, inflationary
pressures intensified to a four-month high, with both input costs and selling
prices rising at higher rates across both manufacturing and services.