| Actual | Previous | Consensus | Consensus Range | |
|---|---|---|---|---|
| Composite Index | 50.1 | 46.8 | ||
| Services Index | 50.6 | 46.8 | 50.5 | 50.5 to 50.5 |
Highlights
The services PMI ends February at 50.6, up 1 tenth from the mid-month flash and up a sizable 3.4 points from January. Still, February's reading is just slighlty north of the 50-breakeven mark and so indicates very little growth in general activity versus Janaury.
The biggest negative in the report is another decline in new orders while the biggest positive is a sharp rise in employment, the latter underscoring what is rising optimism among the sample which is at its best level in nearly a year. Expectations for an easing in inflation are behind the upbeat mood, though February's report nevertheless shows a sharp rise in input costs tied to rising interest rates. Wage pressures are also noted. Watch for the ISM services at the top of the hour.
The biggest negative in the report is another decline in new orders while the biggest positive is a sharp rise in employment, the latter underscoring what is rising optimism among the sample which is at its best level in nearly a year. Expectations for an easing in inflation are behind the upbeat mood, though February's report nevertheless shows a sharp rise in input costs tied to rising interest rates. Wage pressures are also noted. Watch for the ISM services at the top of the hour.
Market Consensus Before Announcement
No change at the mid-month's 50.5 is the call for the PMI service's February final.
Definition
US Services Purchasing Managers' Index (PMI) is based on monthly questionnaire surveys collected from over 400 U.S. companies which provide a leading indication of what is happening in the private sector services economy. It is seasonally adjusted and is calculated from seven components, including New Business, Employment and Business Expectations.
Description
Investors need to keep their fingers on the pulse of the economy because it indicates how various types of investments will perform. The Markit Services PMI provides advance insight into the services sector, which gives investors a better understanding of business conditions and valuable information about the economic backdrop of various markets. The stock market likes to see healthy economic growth which generally translates to higher corporate profits. The bond market prefers less rapid growth and is extremely sensitive to whether the economy is growing too quickly and causing potential inflationary pressures. The PMI data are also used by many Central Banks to help make interest rate decisions.
The IHS Markit Services Flash data give a detailed look at the services sector, the pace of growth and the direction of this sector. Since the service sector accounts for more than three-quarters of U.S. GDP, this report has a significant influence on the markets. In addition, its sub-indexes provide a picture of new business, employment, business expectations and prices.
The IHS Markit Services Flash data give a detailed look at the services sector, the pace of growth and the direction of this sector. Since the service sector accounts for more than three-quarters of U.S. GDP, this report has a significant influence on the markets. In addition, its sub-indexes provide a picture of new business, employment, business expectations and prices.
