- Business activity index vs 55.9 prior
- Employment 47.9 vs 48.0 prior
- New orders 57.3 vs 53.5 prior
- Prices paid 71.3 vs 70.7 prior
- Supplier deliveries vs 56.8 prior
- Inventories vs 53.1 prior
- Backlog of orders vs 53.0 prior
- New export orders vs 52.1 prior
- Imports vs 54.7 prior
- Inventory sentiment vs 55.1 prior
The details are a tad worse than the headline and that prices paid number is worrisome. Despite several indicators showing a better jobs market, this one is still in contraction.
Before today’s report, the ISM services report showed the U.S. services sector remained in expansion through April, though the details were more mixed than the headline suggested. The Services PMI slipped to 53.6 from 54.0 in March, marking the 22nd straight month above the 50 threshold. Business activity improved to 55.9, suggesting current demand remained resilient, but new orders fell sharply to 53.5 from 60.6, indicating that March’s surge may have reflected some front-loading ahead of expected price increases. Employment remained the weak spot, contracting for a second straight month at 48.0, even with some improvement from March’s 45.2 reading.
The inflation signal was harder to dismiss. The prices index held at 70.7, matching the highest reading since October 2022 and staying above 60 for a 17th consecutive month. ISM respondents continued to cite higher oil, fuel, freight, labor and commodity costs, with no commodities listed as down in price. Supplier deliveries also slowed further, while backlogs stayed in expansion for a third month
