By Robb M. Stewart


U.S. service-sector activity grew in the first month of the year, marking a rebound after December snapped a run of 30 straight months of growth.

The Institute for Supply Management's services activity index rose to 55.2 in January from a downwardly revised 49.2 in December, topping the 50.6 expected by economists polled by The Wall Street Journal. The composite index in December contracted for the first time since May 2020.

The index, which is based on a survey of services providers across the U.S., suggests activity in the sector returned to growth. A reading of 50 marks the separation between expansion and contraction.

Anthony Nieves, chairman of ISM services business survey committee, said survey respondents indicated that capacity and logistics performance continues to improve and that overall business is trending in a positive direction, though responses varied by industry and company.

Ten of the services industries surveyed reported growth for the opening month of the year, while eight reported a decrease for the month.

On Wednesday, data from a similar survey of manufacturers showed that factory activity continued to lose momentum in January as activity was dented by still-high prices and sluggish demand. ISM's index of U.S. manufacturing activity declined to 47.4 for the month from 48.4 in December.

The services index showed that new orders again grew in January after contracting the month before, with the new orders index advancing to 60.4 from 45.2.

The employment index was largely unchanged, registering 50.0 after a reading of 49.4 the month before.

The index for supplier deliveries also was flat for the month at 50.0, up from a reading of 48.5 in December. A reading above 50 indicates faster deliveries, which is typical of an improving economy and increases in customer demand.

Inventories for the month again contracted, although the pace of decline lessened, and the backlog of orders grew at a faster pace than in December.

Inflation pressures remained, though at a cooler pace, with the prices index easing to 67.8 from 68.1.


Write to Robb M. Stewart at robb.stewart@wsj.com


(END) Dow Jones Newswires

02-03-23 1047ET