U.S. April ISM Services - A correction higher within a slowing trend
April’s ISM services index of 51.6 has corrected higher from March’s 50.8 though remains quite subdued and is weaker than each index from September through February. Prices paid accelerated, to 65.1 from 60.9, reaching their highest since January 2023.
With most regional service surveys weak and the S and P services PMI revised down to 50.8 from 51.4 we see the resilience of the ISM as corrective within a slowing trend as tariffs weigh on activity.
Corrections higher from weaker March data were seen in new orders, to 52.3 from 50.4, and employment, to 49.0 from 46.2. Employment is still seeing a second straight negative after five straight positives, but new orders are at a 4-month high, if still quite moderate.
Business activity moved towards new orders with slippage to 53.7 from 55.9, while the final component of the composite, delivery times, was firmer at 51.3 from 50.6. Prices paid are not a contributor to the composite, but suggest rising inflationary risk.
Imports were very weak at 44.3 from 52.6 as tariffs kicked in, while exports remained weak if up to 48.6 from 45.8. Neither contributes to the composite.
