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US Services PMI Improves But New Orders Drop To Post-Recession Low

Submitted by Tyler Durden on 01/27/2015 11:02 -0400

Just when you hoped the bad news was bad enough to warrant an uber-dovish Fed statement, Markit's US Services PMI prints 54.0, beating estimates of 53.8 and up from December's 53.0. After 6 months of dropping, January's preliminary data rose; however, as Markit notes, new business expansion fell to a post-recession low, “The 5.0% an nualised rate of GDP expansion in the third quarter certainly looks like a peaking in the pace of expansion, with the surveys pointing to 2.5% annualised growth at the start of the year."

As Markit concludes,

“The January manufacturing and services surveys collectively recorded the weakest monthly increase in new orders since the recession, sending a major warning light flashing that growth of demand has continued to slow at the start of the year.

“The 5.0% an nualised rate of GDP expansion in the third quarter certainly looks like a peaking in the pace of expansion, with the surveys pointing to 2.5% annualised growth at the start of the year.

“Input costs meanwhile showed no increase for the first time since 2 009, highlighting how lower oil prices are feeding through to the economy and should drive inflation down further in coming months.

“The surveys therefore send a dovish signal for interest rates, and if official data such as Friday’s GDP report sends similar signs of the economy cooling, expectations of the first rate hikes are likely to get pushed back into late 2015 and even, as we have seen in the UK recently, early 2016

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Tue, 01/27/2015 - 11:05 | 5710637 Tsar Pointless

Meanwhile, the conned-sumer is more conned-fident than ever.

http://mam.econoday.com/byshoweventfull.asp?fid=467256&cust=mam&year=201...

Tue, 01/27/2015 - 11:07 | 5710644 Ness.

Here come the PPT/FedSpeak to the rescue. <Warning> Cover shorts now!

Tue, 01/27/2015 - 11:44 | 5710861 Ness.

I've never been so happy to be so wrong in my life. Timberrrrr bitchez!!!

Tue, 01/27/2015 - 11:07 | 5710645 rccalhoun

good number, im going shopping

Tue, 01/27/2015 - 11:06 | 5710649 wrs1

The Fed needs a dollar negative type of statement but it's not going to do anymore QE, so what is really dollar negative? US rates should be much higher given the level of the dollar right now.

Tue, 01/27/2015 - 11:08 | 5710653 Soul Glow

Arther Anderson haven't been doing their job right this morning.

Tue, 01/27/2015 - 11:09 | 5710667 Dr. Engali

Usually businesses only expand when there is business to be had. .gov can only gloss over the numbers for so long in this paper recovery before the truth catches up with them.

Tue, 01/27/2015 - 11:10 | 5710668 Bush Baby

Investors aren't afraid of a real down turn , any logical caution or fear has long been removed from their minds through years of Cental Bank rescue, so now they feel invincible , like the whole thing is FDIC insured to infinity.

Tue, 01/27/2015 - 11:14 | 5710681 Breezy47