Markit Feb prelim US services PMI 58.9 vs 58.0 expected


Markit US surveys for Feb 2021

Markit services chart
  • Highest since March 2015
  • Prior services 58.3
  • Manufacturing 58.5 vs 58.8 exp
  • Prior manufacturing 59.2
  • Composite 58.8 vs 58.7 prior

The services sector is holding up. There’s plenty of optimism out there.

 

Here’s the rub:

Input costs across manufacturing and services
soared higher as demand outstripped supply, rising
at by far the steepest rate since comparable data
were first available in 2009.

It’s not just input prices either. Firms raised their selling prices at the sharpest rate on record.

Commenting on the PMI data, Chris Williamson,
Chief Business Economist at IHS Markit, said:

“Despite headwinds of COVID-19, extreme weather
and record supply chain delays, US businesses
reported the fastest output growth for almost six
years in February.

“The data add to signs that the economy is enjoying
a strong opening quarter to 2021, buoyed by
additional stimulus and the partial reopening of the
economy as virus related restrictions were eased on
average across the country.

“Business sentiment remains buoyant, boosted by
hopes of further stimulus and the vaccine roll out, but
it’s disappointing to see this not yet translate into
stronger jobs growth. Many service sector firms in
particular remain reluctant to hire, cautious about
adding to overheads.

“A concern is that firms costs have surged higher,
driving selling prices for goods and services up at a
survey record pace and hinting at a further increase
in inflation.”

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By Jonathan Prop

Jonathan Prop is an independent financial advisor. He has been working in finance for the last 20 years. After retiring early in his 40s, Jonathan decided to help others get to grip with financial markets, particularly his area of expertise - forex!

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