U.S. business activity remained in expansion territory in January, but signs of cooling momentum emerged. PMI Manufacturing edged up from 51.8 to 51.9, while PMI Services was unchanged at 52.5, lifting Composite PMI marginally from 52.7 to 52.8.
According to Chris Williamson of S&P Global Market Intelligence, the flash PMI signals annualized GDP growth of around 1.5% in December and January. However, he warned that new business growth remains “worryingly subdued” across both manufacturing and services, raising the risk that Q1 growth could disappoint compared with the stronger pace seen last autumn.
Labour market signals were also soft. Jobs growth remained close to stagnation, as firms hesitated to add staff amid uncertainty, weak demand, and elevated costs. At the same time, higher input costs—often blamed on tariffs—continued to push up selling prices, keeping inflation and affordability concerns firmly on businesses’ radar.
