-Chris Williamson, Chief Economist at Markit
Activity growth in the US manufacturing sector rose less than expected in January, being undermined by a strong US Dollar and weaker investment from the energy sector. According to Markit, the final US manufacturing PMI came in at 53.9 in January, the same level as a month earlier and the weakest reading in a year. Factory output growth and job creation remained well below last year's highs, raising prospects for a slower pace of growth in the first quarter, Markit said. While lower oil prices resulted in a weaker demand for investment goods from the energy sector, they also seen helping lower manufacturing costs, which declined for the first time in more than two years and boosting consumer spending power, thereby spurring economic growth. However, analysts feared that the US economic growth is growing increasingly dependent on the domestic consumption, which is another reason besides the slowdown "to believe that policymakers will be wary of raising household's borrowing costs via rate hikes any time soon," Markit said.
In addition to that, a separate report from the Institute for Supply Management showed the US manufacturing sector expanded at the slowest pace in ten months in January, with the corresponding index falling to 53.3 in the beginning of the year, compared with 55.5 in December.
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