New orders are still growing but at the slowest pace in nearly six years with contraction in backlog orders the most severe since early 2014. The 12-month outlook, though still positive, is the least positive in 5-1/2 years. Employment in the sample is still growing but for how long is a question. Price data are not favorable, with inputs down and growth in selling prices at a 5-month low.
The breakdown in the service sector, a breakdown however still isolated to this report, would leave the economy without a central point of strength. The declines here do suggest that domestic demand could be on the downswing and falling in line with sinking demand overseas.
Recent History Of This Indicator:
Lack of optimism in the business outlook and weakness in the energy sector have been pulling down growth in the services PMI. Growth in new orders slowed to a 12-month low in the January report with backlog orders posting a sixth straight month of contraction. The Econoday consensus for the February flash is 53.7 in what would be a 5 tenths decrease from final January's 53.2 and no change from the January flash. Employment has been solid in this report but the weakness in orders does point to less hiring ahead.
Lack of optimism in the business outlook and weakness in the energy sector have been pulling down growth in the services PMI. Growth in new orders slowed to a 12-month low in the January report with backlog orders posting a sixth straight month of contraction. The Econoday consensus for the February flash is 53.7 in what would be a 5 tenths decrease from final January's 53.2 and no change from the January flash. Employment has been solid in this report but the weakness in orders does point to less hiring ahead.
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