| Consensus | Consensus Range | Actual | Previous | |
|---|---|---|---|---|
| Composite Index | 50.9 | 50.9 to 50.9 | 51.3 | 52.1 |
| Services Index | 50.9 | 50.9 to 50.9 | 51.3 | 51.7 |
Highlights
S&P's services PMI ended April at 51.3 to indicate slight monthly growth in composite activity and extending a 10-month run in a very tight range of 50 to 52. The ISM's services index to be released at the top of the hour has been holding within a roughly similar range over this period with April expectations pointing to a small gain to 52.0.
A negative for April's PMI was the first contraction in new orders since last October, which some respondents blamed on high interest rates. Employment was also down as were backlogs. Price pressures eased in the month, both input costs as well as selling prices.
The previously released manufacturing PMI came in at 50.0 to make for a 51.3 reading for the composite as well, again indicating modest growth.
A negative for April's PMI was the first contraction in new orders since last October, which some respondents blamed on high interest rates. Employment was also down as were backlogs. Price pressures eased in the month, both input costs as well as selling prices.
The previously released manufacturing PMI came in at 50.0 to make for a 51.3 reading for the composite as well, again indicating modest growth.
Market Consensus Before Announcement
No change at the mid-month's 50.9 is the consensus for the services PMI's April final. This index ended March at 51.7.
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.
