The U.S. economy demonstrated a robust beginning to 2024, according to the latest flash PMI estimates from S&P Global. Marking a significant upturn, overall business activity accelerated to its fastest pace since mid-2023, driven predominantly by the service sector, with manufacturing also showing signs of recovery following a prolonged slump.
S&P Global US PMI January 2024: Key Highlights
Manufacturing PMI: Surged to 50.3, up from 47.9 in December 2023, surpassing the forecast of 47.9. It marks the first month of expansion since April 2023 and the highest growth since October 2022. This leap marks the end of a lengthy contraction phase.
Services PMI: Climbed to a seven-month peak of 52.9, up from December’s 51.4, outperforming market predictions of 51.
Composite PMI: Jumped from 50.9 to 52.3, indicating the most rapid expansion in business activity since June 2023.
Chart: US Private Sector Activity Expands In January
Major Growth Drivers In January 2024
Demand Improvement: Firms reported a broad-based uptick in demand for goods and services, fueling new order growth.
Business Confidence: Reached a 20-month high, driven by improved sales and optimistic projections for the year.
Price Dynamics: Overall input costs rose at a slower pace, and selling prices increased at the slowest rate since May 2020.
Employment Trends: Companies marginally increased workforce numbers as work backlogs rose for the first time in 10 months.
After the release of the PMI data, the U.S. stock market continued its upward trajectory, extending toward new all-time highs. The S&P 500, as monitored by the SPDR S&P 500 ETF Trust (NYSE:SPY), was 0.5% higher at 9:15 a.m. in New York.
Economist’s Take
Chris Williamson, chief business economist at S&P Global Market Intelligence, highlighted the robust start to the year, citing a marked acceleration in growth alongside a significant cooling of inflation pressures. He emphasized the improvement in output across both goods and services and noted the pickup in new orders.
“Confidence has also been buoyed by hopes of lower inflation in 2024, easing the cost of living squeeze and facilitating the path to lower interest rates. With prices rising in January at the slowest rate since the initialpandemic lockdowns of early 2020, companies report that selling price…
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