The Business Cycle is turning up

2月5日

ISM Services PMI
Rep: 53.4% ✅ HIGHER THAN EXPECTED ✅
Exp: 51.7%
Prev: 50.5% (revised down marginally from 50.6%)

The reading for ISM Services PMI came in much higher than expected with services remaining in expansionary territory for Jan 2024 (>50 Level)

Whilst ISM Manufacturing PMI came in at 49.1 on the 1st Feb (<50 level) and in contractionary territory, it has made a higher low much like Services PMI. Manufacturing has increased from 46 in July 2023 to 49.1 currently.

Services continues to outperform Manufacturing. Both Services and manufacturing appear to be making a series of high lows on the chart which may suggest that this business cycle is starting to turn and curl to the upside.

PUKA

2月5日

ノート

ISM Services Prices had a substantial increase
✅56.5 Expected to 64 Reported....🧐

Bad News for Inflation?
A reading above 50 in Prices suggests that more businesses in the services sector are reporting increased prices, potentially indicating inflationary pressures. Conversely, a reading below 50 suggests that more businesses are reporting decreased prices, which may indicate deflationary pressures.

At present Price inputs for the services sector is coming in much higher than expected and this will likely inflate the cost of those services offered (to cater for the increased cost at source).

Whilst todays ISM Services PMI came in higher than expected (53.4 vs 52) and is positive for a potential turn up in the business cycle into expansionary territory, it comes with an inflationary edge due to such a substantial and notable increase Services Prices.