January purchasing managers' surveys signal that the impressive acceleration in manufacturing activity from the final quarter of 2005 has carried over into the new year.

The latest PMI data point to a slight moderation in the pace of global manufacturing output, to a still robust 5 to 6 percent annual rate.

Tight labor market, acceleration in wages -- it's a description of an economy that's simmering, but it hasn't boiled over yet into inflation.

The labor market exhibited renewed strength, which suggests that manufacturers and service providers expect the current acceleration in growth to be maintained in the coming months.

On balance, purchasing managers remain hesitant in the current manufacturing business climate.

It's a very good number for January. But should we get carried away with the seasonally adjusted number? No. We still expect a slowdown in 2006, no question about it.