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On Tuesday, data from S&P Global had unveiled that the US business activity had contracted for the seventh straight month in a row in January. According to data from S&P Global, the rating agency’s flash US composite output index rose marginally in January to 46.6 compared to a final reading of 45.0 logged in December. Although, the reading had been the highest in three months, US economy still hovers at a contraction territory and several businesses had reported that demands remained softer-than-anticipated, as an inflation-surge across the US remained a key drag to customer spending. On top of that, the S&P Global data had unfurled a robust build-up in price pressures, reflecting that a sky-scrapping inflation-surge across the US economy has been far from over which in effect had bolstered the US Fed’s view that it might need to stay on a gradual rate-hike path this year.
US economy stays in a contraction territory for seventh straight month
Apart from that, the S&P Global’s flash manufacturing PMI (Purchasing Managers’ Index) grew slightly to 46.8 compared to a reading of 46.2 logged in December, however, had topped a median estimate of 46.0.
Besides, the US economy’s vast services sector that accounted for nearly a two-third of entire economic output of the United States, rose to 46.6 this month, up from a 44.7 scored last month. Meanwhile, addressing that the US inflation has still been picking up despite an aggressive monetary policy fostered by the US Federal Reserve, “The worry is that, not only has the survey indicated a downturn in economic activity at the start of the year, but the rate of input cost inflation has accelerated into the new year, linked in part to upward wage pressures, which could encourage a further aggressive tightening of Fed policy despite rising recession risks”.