The January 2021 PMIs from Markit
- Prior was 54.8
- Manufacturing 59.1 vs 56.5 expected
- Prior manufacturing 57.1
- Composite 58.0 vs 55.3 prior — second fastest since 2015
- The rate of input cost inflation was the fastest on record (since October 2009), notably in PPE and transportation
- Services pace of new business growth softened on covid
- Manufacturing new orders rose markedly
- Full release
These are very strong numbers. The survey notes that manufacturers have had better luck passing on cost pressure than services.
From IHS Markit chief economists Chris Williamson:
US businesses reported a strong start to 2021, buoyed by hopes that vaccine developments will mean the worst of the pandemic is behind us, and that the new administration will provide a stable and supportive environment for stronger economic growth. Output growth accelerated in January to the second-fastest in almost six years, and business optimism about the year ahead surged higher. Over the past three months, business sentiment has been running at its highest since the start of 2015.
However, capacity constraints are biting amid the growth spurt. Not only have the last two months seen supply shortages develop at a pace not previously seen in the survey’s history, but prices have also risen due to the imbalance of supply and demand. Input cost inflation consequently also hit a survey high and exerted further upward pressure on average selling prices for goods and services.
There was also disappointing news on the labour market, as near-term concerns over the impact of the pandemic, notably on demand for consumer-facing services,and rising costs led to the weakest employment reading since July.”