April opened the first quarter on an upswing based on the month's PMI flashes which swung higher, to 50.4 for manufacturing and 53.7 for services, both beating Econoday's consensus forecasts and both outside the top of Econoday's consensus ranges.

The manufacturing sample reported renewed expansion for new orders and stronger growth in backlogs as well as output and employment. Price readings are up in line with the uptick in activity as is the sample's general optimism.

Manufacturing's movement back above the 50 line, the first such success since October last year, points to improvement for the very closely watched ISM manufacturing index which fell back more than a point in March to 46.3, its lowest reading since the very beginning of the pandemic three years ago.

Turning to the services sample, new business here is the best since May last year. Backlogs are up as is employment. Prices for this sample are also rising as is confidence. These results will have forecasters marking up their April estimates for ISM services which in March unexpectedly slowed and very sharply to 51.2.

Today's results also lift Econoday's Consensus Divergence Index to very near the neutral zero line, at minus 3 both overall and when excluding prices to indicate that US data are meeting economists' forecasts.

Services popped back to the 50 column in February for the first time in eight months and improved further in March to 52.6; the consensus for April is 51.5. Manufacturing in contrast has been in sub-50 contraction for the last five months though the index in March did move nearly 2 points higher to 49.3; 49.2 is the manufacturing consensus for April.

The flash Composite Purchasing Managers' Index (PMI) provides an early estimate of current private sector output by combining information obtained from surveys of around 1,000 manufacturing and service sector companies. The flash data are released around 10 days ahead of the final report and are typically based upon around 85 percent of the full survey sample. The report tracks changes in variables such as new orders, stock levels, employment and prices across both manufacturing and services. Production is also tracked, defined as"production" for manufacturing and"output" for services. Results are synthesized into a single index which can range between zero and 100. A reading above (below) 50 signals rising (falling) output versus the previous month and the closer to 100 (zero) the faster output is growing (contracting). The report also contains flash estimates of the manufacturing and services PMIs. The data are produced by S&P Global.

Investors need to keep their fingers on the pulse of the economy because it dictates how various types of investments will perform. By tracking economic data such as the purchasing managers' manufacturing indexes, investors will know what the economic backdrop is for the various markets. The stock market likes to see healthy economic growth because that 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.