In January, the tertiary sector index drawn up by the Institute for Supply Management recorded a value of 55.2 points, clearly exceeding the expectations of analysts, which averaged 50.5 points.
The indicator showed a sudden recovery compared to the value of 49.2 recorded in December (revised by 49.6 points), signaling an immediate recovery in consumer demand.
The new orders gauge rose over 15 points and a measure of business activity strengthened. Both indices stand at 60.4, with the former at its highest since the start of 2022.
The data shows that the decline in consumer activity late last year was more of a momentary stumble than the start of a sustained contraction in household demand. When coupled with an incredibly strong January jobs report, the data suggests that the labor market, slowing inflation and rising wages continue to support consumption, at least for now.
“Although answers vary by industry and company, the majority of respondents indicate that the business is moving in a positive direction,” Anthony Nieves, chair of the Service Firms Investigations Committee, said in a statement. ISM extension. “Some companies are still struggling to fill open positions, while others are facilitating staff shedding.”
Ten sectors saw growth last month, including agriculture, utilities and business management and support services. Eight sectors recorded declines, notably transportation and warehousing. The report also showed a rebound in overseas demand, likely a reflection of the reopening of China’s economy after three years of tight restrictions due to Covid-19.