Business activity index drops to 52.4 in January
Employment measure increases to 53.7 from 51.4 in December
Price gauges rise across manufacturing, services sectors

WASHINGTON, Jan 24 Reuters U.S. business activity slowed to a ninthmonth low in January amid rising price pressures, but firms reported boosting hiring, supporting the Federal Reserve39;s cautious approach to cutting interest rates this year.

SP Global said on Friday that its flash U.S. Composite PMI Output Index, which tracks the manufacturing and services sectors, declined to 52.4 this month. That was the lowest level since April and was down from 55.4 in December. A reading above 50 indicates expansion in the private sector.

The services sector accounted for the drop in the PMI, with manufacturing expanding for the first time in seven months on hopes of looser regulation, lower taxes and heightened protectionism under President Donald Trump39;s new administration. But some worried that potential tariffs would disrupt supply chains and impact sales, or stoke inflation.

There were also fears the U.S. central bank could adopt a more hawkish posture to deal with inflation.

Trump, who was sworn in for a second term on Monday, has promised broad tariffs on imports and tax cuts, and is cracking down on illegal immigration.

Uncertainty on the economic impact of the administration39;s trade and immigration policies were among factors that prompted the Fed to scale back its projected rate cuts for this year…