- The ISM Manufacturing and Services indices registered 57.6 and 59.9, respectfully, in January
- The U.S. added 467,000 jobs in January
- The U.S. national debt swelled to $30 trillion as of the end of January
Top Three Market Headlines
Pace of Economic Activity Moderates in January: U.S. economic activity continued to expand in January, albeit at a slower rate, according to surveys of business executives released last week by the Institute for Supply Management (ISM). The ISM Manufacturing index moderated slightly to 57.6 in January from 58.8 in December, while the ISM Services index registered 59.9 in January, down from 62.3 the prior month and 69.1 in November. (A reading above 50 indicates expansion of activity, while a sub-50 mark reflects contraction). This was the 20th straight month both indices signaled expansion of activity.
January Jobs Report Surprises to the Upside: The Labor Department reported last Friday that U.S. nonfarm payrolls increased by 467,000 in January, exceeding economists’ expectations. In addition, the tally of gains for the prior two months was increased by a little more than 700,000. The leisure and hospitality sector added 151,000 jobs in January, indicating that hiring demand remained strong despite the Omicron variant. At the same time, the unemployment rate ticked up slightly in January to 4.0% from 3.9% as more people joined the workforce. The report also indicated mounting pressures on wages, as average hourly earnings increased by 5.7% in January compared to the previous year.
U.S. National Debt Tops $30 Trillion: The U.S. national debt crossed the $30 trillion threshold for the first time at the end of January, it was reported last week. Since January 2020, the national debt has grown by $7 trillion, thanks in large part to aggressive fiscal spending programs enacted in the wake of the Covid-19 pandemic. For the fiscal year ended 9/30/2021, the federal deficit, or annual shortfall of revenues relative to spending, reached $2.8 trillion, which equated to 12.4% of U.S. gross domestic product (GDP), according to the Congressional Budget Office; this compared to a deficit of 4.7% of GDP in the fiscal year ended 9/30/2019, prior to onset of the pandemic.