US January S&P Global flash manfacturing PMI 46.8 vs 46.0 expected | Forexlive

• Manufacturing 46.8 vs 46.0 expected
• Prior was 46.2
• Services PMI 46.6 vs 45.0 expected
• Prior services 44.7
• Composite 46.6 vs 44.6 prior
• New orders declined, led by manufacturing
• Cost burdens increased for the first time in eight months
• Backlogs of work fell
• Business optimism hit a four-month high

This is a better reading but below 50 still points to a contraction.

Commenting on the US flash PMI data, Chris
Williamson, Chief Business Economist at S&P Global
Market Intelligence said:

“The US economy has started 2023 on a disappointingly
soft note, with business activity contracting sharply again
in January. Although moderating compared to December,
the rate of decline is among the steepest seen since the
global financial crisis, reflecting falling activity across both
manufacturing and services.

“Jobs growth has also cooled, with January seeing a far
weaker increase in payroll numbers than evident
throughout much of last year, reflecting a hesitancy to
expand capacity in the face of uncertain trading
conditions in the months ahead. Although the survey saw
a moderation in the rate of order book losses and an
encouraging upturn in business sentiment, the overall
level of confidence remains subdued by historical
standards. Companies cite concerns over the ongoing
impact of high prices and rising interest rates, as well as
lingering worries over supply and labor shortages.

“The worry is that, not only has the survey indicated a
downturn in economic activity at the start of the year, but
the rate of input cost inflation has accelerated into the
new year, linked in part to upward wage pressures, which
could encourage a further aggressive tightening of Fed
policy despite rising recession risks.”