US services sector rebounds in January

Activity in the US services sector hit a 14-month high in January, according to data released on Friday.

Markit’s final services purchasing managers’ index rose to 55.6 from December’s three-month low of 53.9. This was comfortably above the average for the fourth quarter of 2016 and signalled the fastest rate of business activity growth since November 2015.

Meanwhile, the final composite PMI increased to 55.8 in January from 54.1 the month before, marking the strongest jump in private sector business activity since November 2015.

Chris Williamson, chief business economist at IHS Markit, said: “The US economy has started 2017 on the front foot. Business activity across the economy is growing at the fastest rate for over a year and optimism about the business outlook has risen to the highest for a year and a half.

“The January surveys signal annualized GDP growth of approximately 2.5%, setting the scene for a solid first quarter. With January seeing the largest inflow of new business for 18 months, there’s good reason to believe that firms will be even busier in coming months.”