IHS Markit announced the U.S flash manufacturing and services purchasing managers’ index (PMI) for January on Friday. Giving mixed signals, the economic data failed to stir an aggressive movement in the forex market.
Manufacturing activity in the U.S was reported to have slightly dropped in January. Manufacturing PMI came out at 51.7 in January versus a marginally higher 52.4 in December. Analysts were expecting the manufacturing activity to remain unchanged in January.
New Business Growth In Manufacturing Sector Remained Under Pressure In January
Staying above 50, the figure still suggested expansion in the U.S factory activity but the rate was accentuated as the weakest since October 2019. The report further highlighted that output climbed moderately in January but the growth in new business remained under pressure due to falling demand both from domestic as well as foreign clients. The manufacturing sector of the U.S also increased hiring in January but at a pace reported as the slowest in the past four months. IHS also announced price pressures to have begun fading away in the factory sector with the start of the new year.
On the services front, PMI for January in the U.S was revealed at 53.2. The figure was capped at a lower 52.8 in December, following which, experts had forecast the U.S services sector to post the PMI at 52.9 in January. As per the report, the services sector expanded at the fastest pace in January in the past 10 months. Much like the manufacturing sector, however, growth in output at large wasn’t mirrored in the data for new orders. The sales data, however, suggested rising demand as compared to 2019’s second half.
Business Confidence Remained Below The Series Trend In The Services Sector
Friday’s economic data also hinted at a rising rate of hiring in the services sector in January. In terms of business expectations, optimism was cited as the best in the past seven months. Business confidence, on the other hand, failed to surpass the series trend. Lastly, input price inflation posted the fastest increase in its rate since July 2019. The U.S services sector was also reported to have increased output charges but at a moderate pace.
In wake of the U.S manufacturing PMI missing the experts’ expectations while the services sector beating the analysts’ estimate, the forex market didn’t respond considerably to Friday’s economic data with the EUR/USD currency pair having dropped from 1.1035 to 1.1020 towards the end of the week.