April was a favorable month for the PMI's services sample, at an index of 53.6 to indicate moderate growth in composite activity relative to March. The index is up 1 tenth from mid-April's flash and up a full point from March. And though no stronger than moderate, April's result is nevertheless the best since April last year.

New orders are by far the most important reading in the report (arguably more so than the composite headline) and these posted their best rate of growth, though modest, since May last year. Backlog orders are rising, which is another very important positive, which in turn is driving demand for employment which also increased relative to March. Output rose for a third straight month and, once again, at the fastest rate in a year's time.

In news that highlights this afternoon's FOMC announcement, inflationary pressures for the sample increased in line with general activity, both for input costs which rose at the sharpest clip since January and selling prices which rose at the sharpest pace since August last year and which in part reflected pressure on wages.

The results are no surprise and won't upset expectations for modest improvement for the ISM services index at the top of the hour.

No change at the mid-month's 53.7 is the call for the PMI service's April final.

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.

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.