Beat On U.S. January PMIs, With Services-Manuf Divergence

January prelim U.S. PMIs saw a strong beat versus expectations in both manufacturing (a record-high 59.1 vs 56.5 surv., 57.1 prior) and services (57.5, vs 53.4 surv., 54.8 prior). Composite rose from 55.3 to 58.0, marking the 2nd fastest expansion since March 2015. A few highlights from the IHS Markit press release:

• Goods / services disconnect in new orders... "service providers indicated a slower expansion in new orders ... [but] the upturn among manufacturers accelerated and was the steepest since September 2014."
• ...and in employment: " the rate of job creation eased to only a modest pace. Goods producers, however, indicated the quickest increase in employment for two years, with challenging demand conditions in the service sector weighing on overall hiring"
• Input price pressures intensify: "supplier delays and shortages pushed input prices higher. The rate of input cost inflation was the fastest on record"
• ...and being passed along: "a number of firms were able to partially pass-on greater cost burdens, however, as the pace of charge inflation quickened to a steep rate. The impact was less marked in the service sector as firms sought to boost sales, but manufacturers registered the sharpest rise in selling prices since July 2008."