Markit US February services PMI
- Best reading since July 2014
- Prelim was 58.9
- Prior was 58.3
- Composite index 59.5 vs 58.8 prior
- Input and output cost inflation accelerating to the fastest on record (since October 2009)
- New order inflows expanded at the steepest pace since April 2018
- Employment continued to rise in February, albeit only fractionally
- Full report
The ISM services report is due at the top of the hour and forecast flat at 58.7. This adds some upside risk.
Commenting on the latest survey results, Chris Williamson, Chief Business Economist at IHS Markit, said:
"US business activity is growing at the fastest rate for six-and-a-half years, setting the economy up for a strong start to 2021. Although consumer-facing sectors, notably hospitality, travel, and tourism, continue to be adversely affected by COVID-19 restrictions, and will be for some time to come, other parts of the economy are springing back into life. Financial services and business services are faring well, accompanying a strong manufacturing recovery. Even some hard hit consumer-facing sectors are enjoying some loosening of restrictions or adapting to life with the virus.
"A wide variety of costs are rising, however, putting additional pressure on companies across the board. Many materials prices are sharply higher, transport costs are increasing and wage pressures are building as firms struggle to hire suitable staff, resulting in the largest monthly rise in service sector costs since comparable data were first available in 2009.
"Some of these higher costs will inevitably prove transitory as pandemic-related disruptions to supply start to ease, but it remains unclear how long these price pressures will persist for due to uncertainties over the duration of social distancing requirements and the strength of demand over the coming months."
