In the wake of a much improved read on the US manufacturing sector and a blistering update on the labor market, macro watchers were keenly eyeing Monday’s only top-tier data release for evidence that services sector activity across the world’s largest economy re-accelerated last month.

As it turns out, it did. Activity picked up meaningfully, as did an underlying measure of hiring which unexpectedly plummeted in December.

ISM services printed 53.4 for January, Monday’s release showed. That was ahead of every estimate from nearly five-dozen economists and marked the best reading since September.

Meanwhile, the final read on S&P Global’s services gauge ticked lower from the flash print, but nevertheless sustained a seven-month high at 52.5, spurred on by financial services, apparently.

“The US service sector started the year in a sweet spot, with output and demand growth accelerating while price pressures cooled markedly,” Chris Williamson, Chief Business Economist at S&P Global Market Intelligence, said.

That’s nice to hear and generally reflects the commentary from the color that accompanied the flash readings, but it’s worth noting that the ISM prices paid index jumped to 64, a sharp increase from December, and the highest in nearly a year.

The surge mirrored a very pronounced increase on the factory-side prices index, discussed here last week.

ISM’s Anthony Nieves said a majority of respondents described their business as “steady.” Panelists are apparently looking forward to Fed easing. “They are optimistic about the economy due to the potential impact of interest rate cuts,” Nieves remarked, even as he described caution around “inflation, cost pressures and ongoing geopolitical conflicts.”

Notably, the ISM services employment index moved back into expansion territory, erasing an anomalous drop in December.

As noted in my week-ahead macro preview, some observers juxtaposed December’s drop on the gauge with robust payrolls to suggest a disparity. That ostensible incongruity is less acute now.

All in all, the ISM release underscored the notion that, if anything, the US economy picked up steam last month. At the margins anyway, that’s conducive to rekindled price pressures.

Taken with the jobs report, it was another strike against March rate-cut bets.