January PMITM data signalled a sharper expansion in business activity across the U.S. service sector. Excluding November's recent high, the latest upturn was the fastest since March 2015, amid a stronger rise in new business. Foreign client demand also picked up, as new export orders returned to growth. Despite a notable improvement in business confidence, the rate of job creation eased as pressure on capacity dwindled and concerns regarding the short-term outlook remained.
Meanwhile, cost burdens soared once again, with the rate of input price inflation the fastest since the survey began in 2009. Firms largely passed on higher costs to clients through a marked rise in charges.
The seasonally adjusted final IHS Markit US Services PMI Business Activity Index registered 58.3 in January, up from 54.8 in December and higher than the earlier released 'flash' estimate of 57.5. The rate of growth was the second-sharpest in almost six years, with firms linking the upturn to stronger client demand and an increase in new business.
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