The US services sector’s generally fine. In case you harbored any doubts on that front.

Hot on the heels of a surprisingly robust read on American manufacturing, the marquee measure of services activity printed a decent 53.8 for January, down from December’s pre-revision print, but a touch ahead of estimates.

This is the first time both ISM headlines have printed in expansion territory together since February of 2025, which is to say since before Donald Trump’s tariff blitz, which we now know had an adverse impact on private-sector hiring.

Wednesday’s update came with revisions to last year’s data. December’s readout was marked lower such that January’s 53.8 still counts as the highest since late 2024.

The underlying indexes were generally decent, even as new orders slipped nearly 3.5ppt to 53.1.

January was the “second month in a row of all four subindexes being in expansion territory,” said ISM’s Steve Miller, who noted that the employment gauge has now spent two months above 50 for the first time in a year.

Still, and as the figure above shows, the jobs metric’s barely hanging on in expansion territory and the prices gauge continues to tip pervasive input cost pressure.

The panelist responses were pretty mundane. As one participant in Management of Companies & Support Services put it, “Still slow but more optimistic.” There were lots of AI mentions.

Miller went on to say that January’s respondent commentary included more “on tariff impacts and uncertainty, potentially the result of annual contract renewals and geopolitical tensions.”