US Markit PMI drops more than expected in January

Markit’s flash US service purchasing managers’ business index slipped to 53.7 in January from 54.3 in December.

This signalled the slowest expansion of service sector output since December 2014 and fell short of economists’ expectations for a reading of 54.

Markit said the headline index has now pointed to weaker overall growth in four of the past five months.

Meanwhile, the flash US Composite PMI output index nudged down to 53.7 in January from 54 the previous month.

Markit’s chief economist, Chris Williamson, said: “The survey data paint an inauspicious start to the year for the US economy. A struggling manufacturing economy is being accompanied by a services sector where growth showed further signs of losing momentum in January even before the bad weather hit.

“The data are by no means disastrous, signalling a 1.5% annualised rate of economic growth at the start of the year, but the drop in business confidence to one of its lowest levels for over five years suggests that firms are bracing themselves for worse to come.”