U.S. business activity grew at its slowest pace in 18 months in January as a winter surge in COVID-19 infections worsened worker shortages at factories, though demand remained strong, Reuters reported. Data firm IHS Markit said on Monday its flash U.S. Composite PMI Output Index, which tracks the manufacturing and services sectors, fell to a reading of 50.8 this month from 57.0 in December. That was the lowest level since July 2020. A reading above 50 indicates growth in the private sector. The flash composite orders index slipped to a still-high reading of 55.0 from 56.6 in December. The IHS Markit survey's flash services sector PMI dropped to a reading of 50.9, also the lowest since July 2020, from 57.6 in December. Economists polled by Reuters had forecast a reading of 55.0 this month for the services sector, which accounts for more than two-thirds of U.S. economic activity. Services industry businesses reported that labor shortages, employee absences and Omicron held back growth. Still, demand for services remained strong and companies managed to hire more workers, reducing the backlog of unfinished work.
