- Prelim was 53.7
- Prior was 52.6
- Composite 53.4 vs 53.4 prelim
- Prior composite was 52.3
- Services rate of expansion in new orders was the sharpest for almost a year
- The increase in services selling prices quickened to the fastest since August 2022
The ISM services report is due at the top of the hour.
Chris Williamson, Chief Business Economist at S&P Global Market Intelligence, said:
"April saw an encouraging acceleration of service sector growth which, combined with indications of a renewed upturn in manufacturing, suggests the economy has regained some momentum at the start of the second quarter.
"Companies have reported an improvement in confidence compared to the gloomier picture seen late last year, with service sector companies also benefiting from a post-pandemic tailwind of spending shifting from goods to services, notably among consumers.
"However, there are indications that resurgent demand for services is reigniting inflationary pressures. Average rates charged for services are now rising at the sharpest rate for eight months, as firms report a greater ability to pass increased costs on to customers. This upturn in the service sector selling price gauge hints at a concerningly stubborn stickiness of core inflation .
"Much of course depends on whether this recovery in demand can persist. Headwinds from higher interest rates and the increased costs of living, combined with the winding down of household savings, suggest the upturn could lose steam in the months ahead."
This is still well-above 50 and the pre-pandemic average.
When you see a report like this, it looks as if the Fed's only option to get inflation under control is to hike the US into a tough recession. Still, it's only one data point and the ISM data isn't (yet) painting the same picture.