Business activity in the US grew at a slower rate in January, weighed down by a slowdown across the service sector, data showed on Friday.
S&P’s flash composite purchasing managers index subsided from 55.4 to 52.4 between December and January, signalling slower output growth since the turn of the year.
Missing expectations, S&P noted the moderating figure coincided with a surge in inflationary pressure to a four-month high.
Price pressures increased across both the services and manufacturing sectors, as both input and selling costs climbed.
Service sector PMI hit a nine-month low of 52.8, against December’s 56.8, while the manufacturing index climbed into growth territory from 47.7 to 50.2 for a six-month high.
“Although output growth slowed slightly in January, sustained confidence suggests that this slowdown might be short-lived,” S&P economist Chris Williamson commented.
“Especially encouraging is the upturn in hiring that has been fueled by the improved business outlook, with jobs being created at a rate not seen for two-and-a-half years.
“However, rising price pressures are a concern, with companies reporting supplier-driven price hikes as well as wage growth amid poor staff availability.
“Higher input cost and selling price inflation was broad-based across goods and services and, if sustained, could add to worries that a combination of robust economic growth, a strong job market, and higher inflation could encourage a more hawkish policy approach from the Fed.”