US ISM Non-manufacturing: Activity hit a cycle high in January - Wells Fargo

The ISM non-manufacturing index rose 3.9 points to 59.9, its highest reading of the cycle, point out analysts from Well Fargo. According to them, the new orders index was the main driver of the recovery from December, when there was a slight lull in service sector activity.

Key Quotes: 

“After cooling in December, the ISM non-manufacturing index rose to a new cycle high of 59.9 in January. The index had already posted a decade-high this fall following hurricane-related distortions, but the January reading appears to be the result of overall firming in the sector.”

“Services firms saw increasing prices in 15 of the 18 reporting industries. That echoes reports from the factory sector in January. While one month does not make a trend, we will watch these closely during the next few months to see if a trend takes hold.”

“Export and import activity has perked up, with both indices above their 6-month averages in January. The rise in imports is stronger, suggesting trade may again be a drag on Q1 GDP growth.”