PMI Services Flash Slowing, But Still Solid

Growth in the nation's service sector is slowing but still solid, at a flash PMI of 53.7 in January vs 54.3 in the final December report and the same 53.7 in the December flash. Growth is as slow as it's been in a year, reflecting what the report says are cutbacks in the energy sector, uncertainty over the economic outlook, and also the strength of the dollar which is holding down service exports. Still, new orders rebounded in the latest report though backlogs are in contraction for a sixth straight month. The report attributes some of the drawdown in backlogs to an upturn for hiring which is a positive indication for the January employment report. Price data, like in other reports, are muted. This report is consistent with what is a moderate outlook this year for economic growth.