The U.S. services sector expanded in January as the non-manufacturing business activity composite index was 59.9, compared to 56.0 in December, on a seasonally adjusted basis, the Institute for Supply Management reported Monday.
An index reading below 50 signals a slowing economy, while a level above 50 suggests expansion.
Economists polled by IFR Markets had expected a 56.5 level.
The prices paid index crept to 61.9 from 59.9. The employment index gained to 61.6 from 56.3.
The business activity/production index rose to 59.8 from 57.8, the new orders index was at 62.7, up from 54.5; backlog of orders gained to 50.5 from 50.0; new export orders increased to 58.0 from 56.5; inventories slid to 49.0 from 53.5; inventory sentiment slid to 61.0 from 62.5; the supplier deliveries index remained at 55.5; and imports grew to 54.0 from 52.5.
Members' general comments on business in the month included:
- "Executive management [is] excited about tax breaks for CapEx purchases in [the] new tax bill." (Information)
- "Month-over-month steady growth, on average, [is] 3 percent on project volume and 1 percent on total revenue." (Construction)
- "Signs of strong growth [in] financial performance expectations given the recent tax changes." (Finance & Insurance)
- "Positive outlook for 2018. We see huge pricing pressure." (Health Care & Social Assistance)
- "Business is starting off solid." (Accommodation & Food Services)
- "First quarter begins slow like 2017, but expect things to pick up later in Q1. Outlook continues to look bright for 2018." (Professional, Scientific & Technical Services)
- "Business activity is low due to the continued partial funding [of] bills passed (continuing resolutions)." (Public Administration)
- "Overall, sales velocity looks strong. Some regional differences due to weather conditions, but overall, a strong month." (Wholesale Trade)