US: S&P Global Manufacturing PMI rises to 46.8, Services PMI improves to 46.6 in January

• S&P Global Manufacturing and Services PMIs rose modestly in early January.
• US Dollar Index holds in positive territory above 102.00.

The business activity in the US private sector continued to contract in early January, albeit at a softer pace than in December. S&P Global Manufacturing PMI edged higher to 46.8 from 46.2 and Services PMI recovered to 46.6 from 44.7. Finally, the Composite PMI came in at 46.6, compared to 45 in December. All these figures came in slightly better than the market expectations.

Commenting on the data, “the US economy has started 2023 on a disappointingly soft note, with business activity contracting sharply again in January,” noted Chris Williamson, Chief Business Economist at S&P Global Market Intelligence.

“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,” Williamson added. 

Regarding input price pressures, Williamson explained that the rate of input cost inflation has accelerated into the new year, linked in part to upward wage pressures.

Market reaction

With the initial reaction, the US Dollar gathered strength against its rivals and the US Dollar Index was last seen rising 0.25% on the day at 102.25.