US factory sector activity shrinks more quickly than expected in January, ISM says
Factory sector activity in the US shrank more quickly than expected at the beginning of 2023, the results of a closely followed survey showed.
The Institute for Supply Management's manufacturing sector Purchasing Managers' Index slipped from a reading of 48.4 for December to 47.4 in January.
Economists had penciled in a print of 48.1.
A key gauge for new orders weakened further, falling from 45.1 to 42.5, while that for prices rose from 39.4 to 44.5.
The employment subindex only edged lower from 50.8 to 50.6 and was indicative of continued hiring as it remained above the 50 point threshold.
"The better news is that the rebound in China’s manufacturing sector likely will stabilise U.S. manufacturing activity in the months ahead," said Ian Shepherdson, chief economist at Pantheon Macroeconomics.
"[...] That upturn in China will take two-to-three months to feed through to an improvement in U.S. manufacturing, based on the historical relationship, but we expect to see a clear rebound in the ISM index by the end of the first quarter."