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Following Manufacturing surveys' surge in January (both S&P Global and PMI), Services surveys were both expected to rise also in January, tracking the rise in 'hard' data recently.

• S&P Global's ISM Services survey rose from 51.4 in December to 52.5 (final) in January (but declined from the 52.9 flash print for January). That is still the highest Services print since June 2023.

• ISM's Services survey jumped from 50.5 to 53.4, well above the 52.0 expected. This is the highest Services PMI since October.

Source: Bloomberg

Employment rebounded strongly. New Oreders picked up, but prices exploded higher…

Source: Bloomberg

That's the biggest MoM jump in ISM Services Prices since 2012!

Here's why:

So that's bad – but if you prefer to ignore it, here's what S&P Global thinks about prices!:

So either prices are at their second lower in three years or at their highest in a year!

Chris Williamson, Chief Business Economist at S&P Global Market Intelligence, said:

The US Composite index rose from 50.9 to 52.0 (less than the 52.3 flash print though) with Services expansion trumping Manufacturing weakness:

Finally, Williamson notes that "business optimism about growth prospects in the service sector has likewise jumped higher, encouraging further payroll growth, albeit the latter limited by labor shortages. "

But here's a PMI respondent's view:

Stronger growth and no price pressure – not exactly a recipe for cutting rates?