The ISM non-manufacturing (aka ISM Services) index continues its growth cycle, and improved marginally from 56.5 to 57.8 (above 50 signals expansion). Important internals improved and remained in expansion. On the other hand, Market PMI Services Index was released this morning and declined.
This was within the range of market forecasts of 54.0 to 57.5 (consensus 56.5).
For comparison, the Market PMI Services Index was released this morning also – and it strengthened instead of weakening. Here is the analysis from Bloomberg:
| PMI Services Index |
| Released On 5/5/2015 9:45:00 AM For Apr, 2015 |
| Prior |
Consensus |
Consensus Range |
Actual |
| Level |
59.2 |
57.7 |
57.5 to 59.1 |
57.4 |
Highlights
With housing flat and manufacturing down, service is the bread-and-butter sector of the economy right now. The PMI services index held at a very strong 57.4 vs an even more impressive 59.2 in March. The sample’s confidence in the long-term US economic outlook is strong as is hiring. Both costs and finished prices rose but from low levels. Still, these are still some of the first inflation signals of any report. Today’s report underscores the strength of the domestic economy. The ISM non-manufacturing report, to be posted at 10:00 a.m. ET, has also been showing solid strength.
Recent History Of This Indicator
The PMI services index has been strong, underscoring the strength of the domestic economy. The mid-month flash for this report came in at 57.8 with expectations for the final reading at 57.7. The long-term average for this index is 55.9. Recent strength has been centered in new orders and also employment where gains have been robust.
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There are two sub-indexes in the NMI which have good correlations to the economy – the Business Activity Index and the New Orders Index – and both have good track records in spotting an incipient recession. The Business Activity Index declined and the New Orders Index marginally improved – with both remaining in territories associated with moderate expansion.
