US ISM Services PMI was unchanged at 53.8 in January, matching expectations and marking a second consecutive month at the highest level since October 2024. The steady headline reading points to continued resilience in the services sector, which remains a key pillar of overall economic momentum.
Beneath the surface, the details were mixed. Business activity strengthened notably, with the production index rising from 55.2 to 57.4. However, new orders eased back to 53.1 from 56.5. Employment index slipped closer to stagnation at 50.3, down from 51.7. Inflation signals firmed. The prices index climbed sharply from 65.1 to 66.6, highlighting renewed cost pressures in the services sector. Even so, all four major subcomponents remained in expansion territory for a second month.
Based on the historical relationship tracked by the Institute for Supply Management, the January PMI reading is consistent with roughly 1.8 percentage points of annualized real GDP growth.
