| Consensus | Consensus Range | Actual | Previous | |
| Composite Index | 52.0 | 52.0 to 52.0 | 51.7 | 50.3 |
| Services Index | 52.1 | 51.0 | 49.8 |
Highlights
The services PMI misses expectations of 52.1 to come in at 51.0, not a big miss and still in marginal expansion and up from 49.8 in March. Unfortunately, the report cites a decline in new orders, the first such decline since April 2024, and blames the Mideast war. That bodes poorly for the outlook unless there is a faster than expected end to the US-Iran war.
Market Consensus Before Announcement
The consensus looks for no revision from the flash at 52.0 for the April composite final, up from 50.3 in March. For services, an upward revision is expected to 52.1 from 51.3 in the flash versus 49.8 in March.
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.