Global business activity starts 2016 on weak note

Wed Feb 3, 2016 1:26pm EST
 
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By Jonathan Cable

LONDON (Reuters) - Global economic growth began 2016 on a weak note, surveys of business activity suggested on Wednesday, and with inflation remaining low central banks are seen under pressure to keep monetary policies easy.

U.S. and European stocks were lower on Wednesday in the wake the business surveys, though weak oil prices continue to be a major factor in stock and bond markets.

US SERVICE SECTOR GROWTH SLOWS

U.S. service sector activity slowed in January, suggesting economic growth weakened at the start of the first quarter even though the labor market remained resilient.

The U.S. service sector purchasing managers' index (PMI) from data vendor Markit for Jan fell to 53.2, the lowest since October 2013, from 54.3 in Dec. An index reading above 50 indicates expansion in the sector.

Markit's U.S. composite PMI for both the service and manufacturing sectors fell to 53.2 from 54.0 in Dec.

An alternative reading from the U.S. Institute of Supply Management (ISM) showed the service sector PMI fell to 53.5 in January, the lowest since February 2014, from 55.8 in December.   Continued...

 
A pedestrian walks past an electronic board showing the graph of the recent fluctuations of Japan's Nikkei average outside a brokerage in Tokyo, Japan, February 3, 2016. REUTERS/Yuya Shino