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Friday, March 29, 2024

US Services PMI Improves But New Orders Drop To Post-Recession Low

Courtesy of ZeroHedge. View original post here.

Submitted by Tyler Durden.

Just when you hoped the bad news was bad enough to warrant an uber-dovish Fed statement, Markit’s US Services PMI prints 54.0, beating estimates of 53.8 and up from December’s 53.0. After 6 months of dropping, January’s preliminary data rose; however, as Markit notes, new business expansion fell to a post-recession low, “The 5.0% an nualised rate of GDP expansion in the third quarter certainly looks like a peaking in the pace of expansion, with the surveys pointing to 2.5% annualised growth at the start of the year.”

As Markit concludes,

“The January manufacturing and services surveys collectively recorded the weakest monthly increase in new orders since the recession, sending a major warning light flashing that growth of demand has continued to slow at the start of the year.

“The 5.0% an nualised rate of GDP expansion in the third quarter certainly looks like a peaking in the pace of expansion, with the surveys pointing to 2.5% annualised growth at the start of the year.

“Input costs meanwhile showed no increase for the first time since 2 009, highlighting how lower oil prices are feeding through to the economy and should drive inflation down further in coming months.

“The surveys therefore send a dovish signal for interest rates, and if official data such as Friday’s GDP report sends similar signs of the economy cooling, expectations of the first rate hikes are likely to get pushed back into late 2015 and even, as we have seen in the UK recently, early 2016

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