Photographer: Ty Wright/Bloomberg
(Bloomberg) — US businesses kicked off the new year with only a slight improvement in activity, keeping a lid on demand for workers.
The S&P Global flash January composite output index ticked up 0.1 point to 52.8 after sliding to an eight-month low at the end of 2025, data released Friday showed. Figures above 50 indicate expansion.
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“A worryingly subdued rate of new business growth across both manufacturing and services adds further to signs that first-quarter growth could disappoint,” Chris Williamson, chief business economist at S&P Global Market Intelligence, said in a statement.
“Jobs growth is meanwhile already disappointing, with near stagnant payroll numbers reported again in January, as businesses worry about taking on more staff in an environment of uncertainty, weak demand and high costs,” he said.
Headcount barely expanded in January, and new orders growth — while improved — remains below the pace seen through most of last year.
The group’s manufacturing index ticked higher but held close to the weakest reading since July. Business activity at service providers matched the slowest pace of expansion since April.
New orders at manufacturers expanded modestly in January after shrinking in the prior month for the first time since 2024. A comparable measure for service providers also improved.
While composite indexes of input costs and prices received both eased, neither suggests inflationary pressures are abating quickly. With inflation still above the Federal Reserve’s goal, policymakers are widely expected to hold interest rates steady next week.
On a more upbeat note, manufacturers’ expectations about the outlook improved. A gauge of future output rose to a seven-month high. Service providers, however, were more guarded.
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