Non-manufacturing activity, one of the economy's more critical metrics, continued to improve during the just-concluded month, with that series, put out by the Institute for Supply Management, coming in at a solid 55.2 for January. True, the latest reading was 0.5% below the 55.7 series result registered in December, but it was incrementally better than the 55.0 consensus expectation.

Importantly, this was the 37th consecutive month that the services sector, an area that accounts for some two-thirds of aggregate gross domestic product, had scored an increase. Growth in nonmanufacturing is considered to take place when this series registers a reading above 50.0, while a contraction in such activity is consistent with a score that is below that figure.

In addition to the aggregate result of 55.2, we saw individual components, including business activity (56.4), new orders (54.4), and employment (57.5) register increases in the latest month. Also on the upswing were supplier deliveries, which rose from December's score of 48.5 to a January reading of 52.2. Prices also increased further, going from 56.1 in December to 58.0 last month. On the other hand, backlogs stayed below 50.0, at 49.0. That result, in fact, eased slightly from the prior month's 49.5 reading.

As to the past year, the latest reading was the third highest since last February. The only months to do better were last February, which came in at 56.1, and this past December, when this metric, which is issued by the Institute for Supply Management, an Arizona-based trade group, came in at the aforementioned 55.7. Meanwhile, the average range for the past 12 months has been 56.1 to 52.7, while the full-year average has been 54.5. Clearly, we are comfortably within the past year's range, and slightly better than average.

As to the various industry sectors within this survey, we saw respondents note that volume is up slightly in public administration, that it is still good in construction, which is consistent with the data generally being put out by the housing sector, and that optimism is growing in both residential and commercial real estate.

All in all, this was a decent report, and suggests further that the nation's gross domestic product, which surprisingly dipped by 0.1% in the fourth quarter, will return to a growth mode during the current three months. 

At the time of this article's writing, the author did not have positions in any of the companies mentioned.