U.S. manufacturing data better than expected in January — here’s what that means for the economy

Yahoo Finance Live anchors break down S&P global U.S. services PMI data.

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JULIE HYMAN: And we have some economic data that is just breaking here. The so-called PMI data, Purchasing Managers' Index, coming to us from S&P Global. The Composite PMI coming in at 46.6%, which is 2/10 of a percentage point better than estimated services. PMI also beating at 46.6% versus the 45% that economists were looking for. And Manufacturing PMI at 46.8% versus the 46% that was estimated.

Let's put this data in context for a moment. This is January preliminary data. So it's important because this gives us the most up to the minute, the freshest look on a macro basis, it's what's going on in the US economy. And this survey is of purchasing managers. It's of people on the ground who are putting in these purchase orders for businesses like Jonathan's, for example, and others on the services side and on the manufacturing side.

So it's interesting here, you guys, that this number is indeed coming in better than estimated. You know, it's one of these numbers that cuts both ways. It's great that the number is better than estimated. What does it lead people to think about the Federal Reserve and what they're gonna continue to have to do? I don't think it changes the calculus in terms of what's expected for a 25 basis points increase. But it's another input to think about here.

BRAD SMITH: Yeah, some more economic data coming in. Markets don't seem to be reacting too much. We were still fractionally lower for much of the morning here and still trending in that direction right now. So we'll see exactly how much more this will get kind of priced into today's activity if at all. We'll see.

JULIE HYMAN: Yeah, we will see. One of the other things I notice here, inflation-- the rate of output charge inflation of private sector firms, unchanged from what was seen in December. Input prices actually rose at a faster rate at private sector firms, although it's below what we have seen over the past couple of years. So again, some interesting various inputs here in this data that we're gonna continue to watch.