US services sector remained stable in January; in China it grew at a good pace

Washington. The U.S. services sector remained stable in January, but companies paid more for inputs, suggesting that inflation in the sector could pick up after a slowing trend in recent months.

The Institute for Supply Management (ISM) reported on Wednesday that its non-manufacturing purchasing managers’ index was unchanged at 53.8 last month, amid a moderation in new order growth due to falling exports.

The service sector represents more than two-thirds of economic activity in the United States. The PMI suggested a steady pace of economic activity at the start of the first quarter.

The government is scheduled to release its preliminary estimate of fourth-quarter gross domestic product later this month, which has been delayed.

The ISM survey’s measure of prices paid by businesses for inputs rose to 66.6, with signs of supply strain, from 65.1 in December.

The survey’s new orders indicator fell from 56.5 to 53.1. The export orders gauge contracted to 45, the lowest since March 2023, from 54.2 the previous month.

In China, services grew at their fastest pace in three months in January, thanks to a surge in new orders, and hiring was at its highest level since July last year.

RatingDog’s China General Services PMI, produced by S&P Global, rose to 52.3 in January from 52 the previous month, the highest reading since October. The 50 point mark separates expansion from contraction.

This reading, along with the manufacturing sector survey, points to a provisional improvement for some companies at the beginning of the year. However, it contrasts with an official survey that showed that both industrial and service activity are losing momentum.