The US private sector got off to a strong start in 2021, according to a report out today by IHS Markit, an analysis firm. However, concerns remain, and there was disappointing news on the labor market.
IHS Markit cited its US composite PMI Output Index, saying the US private sector regained growth momentum in January at the second-fastest pace since March 2015. Private-sector business confidence picked up in January amid hopes the vaccine rollout will be a success and business conditions will improve by the second half of 2021.
“US businesses reported a strong start to 2021 buoyed by hopes that vaccine developments will mean the worst of the pandemic is behind us, and that the new administration will provide a stable and supportive environment for stronger economic growth,” said Chris Williamson, chief business economist at IHS Markit.
“Output growth accelerated in January to the second-fastest [level] in almost six years, and business optimism about the year ahead surged higher,” Williamson said. “Over the past three months, business sentiment has been running at its highest since the start of 2015.”
However, Williamson noted capacity constraints and rising prices.
“There was also disappointing news on the labor market, as near-term concerns over the impact of the pandemic, notably on demand for consumer-facing services and rising costs, led to the weakest employment reading since July,” he said.