This month's flash PMIs point to a seventh straight month of contraction for ISM manufacturing but re-acceleration for ISM services. S&P's manufacturing PMI fell back below 50 to a contractionary 48.5 that missed the lower end of Econoday's consensus range. S&P's services PMI by contrast rose 2-1/2 points to 55.1 for the fourth straight plus-50 showing and the strongest since April last year.

Manufacturing where change often signals directional shifts for GDP continues to suffer, with new orders described in S&P's report as having"weakened notiecably" so far this month. The report attributes the weakness to higher selling prices as well as sufficient stocks at customers. Export orders are described as especially weak. Yet the sample continues to keep production up (output at 51.0) by working down backlogs, a compensation that can't go on forever. Nevertheless manufacturing continues to add employees in a signal of optimism supported by a rise in the sample's 12-month outlook, which is now at its best level in a year.

S&P's services sample reports"stronger demand conditions" with new orders coming in at the fastest pace since April last year. Here, export demand is on the rise. This sample is also hiring and at the fastest pace in 10 months in a result that will help lift expectations for May nonfarm payroll growth. Backlogs in this sample are building and 12-month confidence, as it is in manufacturing, is at a 12-month high.

Price indications are mixed with input costs for service providers on the rise and costs for manufacturers contracting and for the first time in three years. Selling prices are likewise mixed: up for services and down for manufacturers and sharply so.

Services have shot into the 50 column the last three reports though the consensus for May is for slowing, at 52.6 versus April's 55.9. Manufacturing edged into the 50 column just last month, at 50.2, with May's consensus at 50 even.

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.