US services industry slowed down in January as the resurgence of the Omicron variant hampered high contract businesses and kept employees at home.
Source: IHS Markit
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The final US Services Purchasing Managers’ Index dropped to 51.2 in January from 57.6 the previous month, largely matching the 51.0 consensus forecast from the Wall Street Journal.
The index signaled that the US services industry expanded only marginally in January, as the reading is slightly above the 50 no-change level that separates expansion from contraction.
Chris Williamson, a chief business economist at IHS Markit, stated that the US economy had been hurt by the Omicron variant at the start of 2022, with growth decelerating to the weakest for 18 months to indicate a near-stagnation of the recovery.
Services firms reported that the spread of the Omicron variant hurt the growth in new business as domestic and foreign demand conditions deteriorated.