US services PMIs beat expectations, signalling solid start to 2026
By Iain Gilbert
Date: Wednesday 04 Feb 2026
(Sharecast News) - S&P Global's services PMI increased to 52.70 points in January, up from 52.50 points in December, pointing to a continued, albeit modest, expansion in the service sector last month.
Meanwhile, S&P's composite PMI rose to 53.0 in January, above both preliminary estimates of 52.8 and December's 52.7 print.
Output growth strengthened across both manufacturing and services, helped by quicker increases in new business. Hiring rose only slightly, however, and business confidence eased. Cost pressures remained elevated, although input inflation continued to cool from late 2025, with a similar slowdown seen in output price growth.
Elsewhere, the Institute for Supply Management's services PMI was unchanged at 53.8 in January, matching December's downwardly revised reading and coming in ahead of expectations for 53.5, pointing to another solid expansion, driven by an accelerated growth in business activity, which climbed to 57.4 from 55.2.
New orders eased to 53.1 from 56.5, while employment slipped to 50.3 from 51.7. Supplier deliveries also slowed, edging down to 54.2 from 51.8, while inventories and order backlogs remained in contraction territory at 45.1 and 44.0, respectively. Price pressures, however, picked up, with the prices‑paid index rising to 66.6 from 65.1.
ISM chair Steve Miller said: "There was more respondent commentary in January on tariff impacts and uncertainty, potentially the result of annual contract renewals and geopolitical tensions. Gasoline and diesel fuel continued to be cited as commodities down in price. With the highest Business Activity and Supplier Deliveries index readings since October 2024, whether pricing increases will stick or expand needs to be closely watched."
Reporting by Iain Gilbert at Sharecast.com
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