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US businesses report ‘solid start’, but January jobs data ‘somewhat disappointing’: IHS Markit

January 25, 2019

US private sector output continued to increase at a solid pace in January, with output growth maintained at a broadly similar pace to that seen through the final quarter of 2018, according to the IHS Markit Flash US Purchasing Managers Index.

However, the rate of staff hiring eased to its weakest since May 2017. Some survey respondents attributed softer employment growth to efforts aimed at improving productivity and streamlining costs.

“US businesses reported a solid start to 2019, with the rate of expansion running only slightly weaker than the average seen in the second half of last year,” said Chris Williamson, chief business economist at IHS Markit. “The resilience of the survey data suggest little impact from the government shutdown on the private sector, with very few companies reporting any material detrimental impact on their output or order books.

The jobs data from the surveys were “somewhat disappointing,” according to Williamson, with the overall rate of job creation slipping to a 20-month low. “However, even this weaker January survey employment index reading is consistent with private sector payroll growth of approximately 150,000,” he said.

Findings released by IHS Markit included:

  • Flash US Composite Output Index at edged up to a two-month high of 54.5 in January, up from 54.4 in December
  • Flash US Services Business Activity Index fell to a four-month low of 54.2, down from 54.4 in December.
  • Flash US Manufacturing PMI rose to a two-month high of 54.9, up from 53.8 in December.
  • Flash US Manufacturing Output Index rose to an eight-month high at 55.9, up from 54.3 in December.


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