PMI Services Growth Holds At Moderate Rate

Growth in the services PMI held at a moderate 53.3 in the final reading for January, a 9-month low and unchanged from the mid-month flash and down 4 tenths from December.

Slowing output is behind the headline moderation but details show plenty of strength including job growth which remains solid and especially order data with new orders expanding at 4-month high while backlog orders rose at a nearly 3-year high. Another key sign of strength comes from prices with selling prices showing increasing traction and input costs, especially for fuel, continuing to rise.

Despite the headline, this report is pointing to a solid 2018 start for the bulk of the U.S. economy. Today's result together with a slight uptick in January's manufacturing PMI released last week makes for a final composite PMI of 53.8 in January vs 54.1 in December.

Recent History Of This Indicator:
PMI services proved soft at the headline level, held down by soft output and coming in under expectations at 53.3 for the January flash. Yet details were solid including acceleration for both new orders and employment and also traction for selling prices. Econoday's consensus for the January final is the same as the flash, at 53.3.