U.S. Economic Growth Slows at Start of Year with Manufacturing and Employment Pressures

Slower Growth at Start of Year

Recent data shows that while the U.S. economy continues to expand at the beginning of the year, the pace has clearly slowed. According to Chris Williamson, Chief Business Economist at S&P Global Market Intelligence, January's PMI preliminary reading indicates a weakening of economic momentum, with both manufacturing and services sectors showing modest growth in new orders.

Weak Performance in Manufacturing and Services

Surveys suggest that the annualized GDP growth rate for December and January is expected to be around 1.5%. However, weak new orders in manufacturing and slower-than-expected service sector expansion indicate a broader loss of economic momentum.

Job Market Stagnation

• Job gains in January were nearly flat
• Companies face weak demand and cost pressures
• Economic uncertainty is limiting hiring confidence

Employers are adopting a cautious approach to hiring, largely due to soft demand, rising costs, and an unclear economic outlook. This slowdown in job market activity further suggests that the first quarter could see weaker-than-expected economic growth.