Last updated: February 5, 2024 at 10:38 a.m. ET
First Published: February 5, 2024 10:01 AM ET
The numbers: A measure of business conditions for service-oriented companies rose to a four-month high in January on a surge of renewed optimism about the U.S. economy.
According to a survey by the Supply Management Association, the percentage rose to 53.5% from 50.5% the previous month. The index had fallen to a seven-month low in December.
The Economist poll…
Numbers: A measure of business conditions for service-oriented companies rose to a four-month high in January as renewed optimism about the U.S. economy surged.
of According to a survey by the Supply Management Association, the percentage rose to 53.5% from 50.5% the previous month.. The index had fallen to a seven-month low in December.
A survey of economists conducted by the Wall Street Journal predicted that the ISM would be 52.0%.
A figure above 50% is considered positive for the economy. The index ranged between 50% and 55% throughout 2023.
“The majority of respondents say business is stable. The potential impact of rate cuts makes them optimistic about the economy,” said survey chair Anthony Nieves.
Big picture: The economy never actually slowed last year, even after the Federal Reserve raised interest rates to 23-year highs to try to rein in inflation.
Instead, growth appears to have accelerated in early 2024 as the prospect of a rate cut in late 2024 looms.
January employment data showed another strong month for employment.
Main details:
- The production gauge remained unchanged at 55.8%.
- The new orders index increased by 2.2 points to 55.0%.
- The employment barometer fell to 43.8% at the end of 2023, the lowest level in three and a half years, before recovering to 50.5%.
- The price paid index, an indicator of inflation, rose 7.3 points to 64.0%. This is a 14-month high. “Inflation, associated cost pressures and ongoing geopolitical conflicts are making companies cautious,” Nieves said.
Future prospects: “Economic signals are mixed. Some sectors are growing rapidly, while others, such as solar and wind power, shipbuilding and electric vehicles, are slowing down,” a senior retail executive told ISM. Told.
“But overall the economy is in good shape and there is no imminent threat of recession.”
Market reaction: In early trading Monday, the Dow Jones Industrial Average
DJIA
and S&P500
SPX
Both declined.
