U.S final services PMI improves slightly to 52.8 in December

IHS Markit announced the U.S final services PMI on Monday. Printing marginally better than the analysts’ forecast, the economic data failed to stir an appreciable movement in the forex market. In a previous estimate, analysts had expected the United States final services PMI to be capped at 52.2. According to IHS data on Monday, however, the index was recorded at 52.8 at the end of 2019. In November, the index was noted at 52.2.

The slight improvement in the services sector business activity in 2019 was largely attributed to a sharp increase in new orders. The increase in new export orders that marked the first time in over half a year, saw the demand from foreign clients following it in its steps. Subsequently, the job creation rate hiked to its best in the past five months. As per the data, business confidence continued to dwell below the average.

Cost Burdens Increased For The Third Month In A Row

In terms of prices, cost burdens went higher for the third month in a row. Owing to an increase in the supplier and wage costs, input prices gained at a quicker rate. While the gain remained confined in the “modest” category, it was still announced as the steepest in over half a year.

Despite the increase in cost burdens, however, the services sector saw an opportunity to deploy a faster pace in increasing selling prices. The output charge inflation rate was declared to have outpaced the increment input prices as it was marked the fastest in almost a year. The rise in output prices was attributed to efforts directed at passing on higher costs to the clients.

Lastly, as per the U.S final services PMI announced on Monday, business expectations were reported to have improved last month with the services sector firms expressing confidence that the activity will rise in 2020. Firms cited expectations of a further boost in new sales for their optimism. Nonetheless, confidence remained significantly below the level at which it ended the year 2018.

December’s Composite PMI Output Index Rose To 52.7 In December

December’s composite PMI output index was announced by IHS Markit at 52.7 in December. The index was recorded at 52.0 in November. The moderate gain in December showed a marginal improvement in the business activity of the private sector last month.

The forex market responded minimally to the IHS data on Monday. EUR/USD could not muster more than 15 pips gain from 1.1181 to 1.1196 following the release of data.