- Prior was 52.9
- Manufacturing 51.6 vs 51.5 expected
- Prior manufacturing was 51.2
- Composite PMI 50.4 vs 52.7 prior
The January services reading was the lowest since April but this is much worse and the lowest since early 2023.
The upbeat mood seen among US businesses at the
start of the year has evaporated, replaced with a
darkening picture of heightened uncertainty, stalling
business activity and rising prices.
“Optimism about the year ahead has slumped from the
near-three-year highs seen at the turn of the year to one
of the gloomiest since the pandemic. Companies report
widespread concerns about the impact of federal
government policies, ranging from spending cuts to
tariffs and geopolitical developments. Sales are
reportedly being hit by the uncertainty caused by the
changing political landscape, and prices are rising amid
tariff-related price hikes from suppliers.
Whereas the survey was indicating robust economic
growth in excess of 2% late last year, the February
survey signals a faltering of annualised GDP growth to
just 0.6%.
While overall inflationary pressures remained muted,
this reflected a squeezing of margins in the services
sector as companies sought to absorb cost increases in
order to offer competitive prices amid weakened
demand. A concern is the sharp, tariff-related, jump in
manufacturing input prices, which will likely either put
further upward pressure on inflation in the coming
months or further squeeze profit margins among US
companies.”
There have been a series of worsening survey-based measures, including on consumers. It’s tough to tell if that’s political noise or angst but it’s been sustained for a worrying amount of time. The US dollar is lower on the headlines, with USD/JPY down about 40 pips quickly.