The latest report by S&P Global reported on Friday the seasonally
adjusted final S&P Global U.S. Services Business Activity Index (PMI) came
in at 46.8 in January 2023, up from 44.7 in December 2022 and slightly above
the earlier released “flash” estimate of 46.6. Still, the latest reading
pointed to the seventh straight shrinkage in business activity across the U.S.
service sector, albeit at a softer pace than in November and December.
Economists had expected the indicator to stay unrevised at 46.6.
According to the report, the January fall in output at service providers
was due to declines in new business and new orders amid weak client demand. In
addition, the pace of employment growth slowed further amid reports of
cost-cutting efforts. Meanwhile, the cost inflation accelerated for the first time
in eight months. However, a sharper increase in input prices was not reflected in
a faster rise in output charges, as selling prices advanced at the slowest pace
since October 2020.