Us Services Sector Shows Growth

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Us Services Sector Shows Growth

Us Services Sector Shows Growth In January, According To Ism

The strong growth trend continues in the US services sector during January 2024. As per the details, employment increased while new orders also showed a healthy jump.

However, the input prices jumped higher and reached a high of 11 months. This made it difficult for the suppliers to keep up, as shown by the ISM survey.

Ism Survey Shows 53.4 Reading

The report from the ISM shows that the PMI for non-manufacturing activities reached 53.4 in January from a reading of 50.5 in the previous month.

Since the reading is +3.4 points from the 50 mid-point, it indicates expansion in the US services sector. This is an essential indicator of the health of the US economy. After all, the services sector accounts for 66% of the US economic activities.

The report also revealed that the employment numbers remained strong in the services sector. The momentum that started from Q4 2023 is also continuing into 2024.

Just a few days ago, the Federal Reserve meeting was held, and the issue of interest rates was discussed. The meeting concluded that the interest rate is still the same.

Ever since the end of COVID-19, the pace of growth in the services sector has been much higher than that of the manufacturing sector. However, this also directly translates to higher inflation levels & and thats the last thing the Federal Reserve wants.

The report showed that the number of new orders also touched 55.0 points in January from an earlier reading of 52.8 during December. Additionally, healthy growth was also seen in the exports from the services sector.

However, the one downside was the input prices, which also jumped to 64.0 from 56.7 during December. As a result, the prices of services in the USA also remained high, which will also show up in the inflation figures.

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