The ISM Non-Mfg (Services) Survey -- a highly regarded indicator of economic prospects -- came in on balance strong for March. Which is consistent with how our macro index is scoring.
However, as was reported in the Manufacturing PMI released Monday -- and regardless of what the presumed architect of Washington's adopted (steel and aluminum), and proposed, tariff schemes would have us believe -- there is indeed a bit of inflation brewing, and erecting greater barriers between U.S. consumers and world producers is a really bad idea.
ISM Non-Mfg Index
Released On 4/4/2018 10:00:00 AM For Mar, 2018
Unusual strength eased a bit in March for ISM's non-manufacturing sample as the index came in near expectations at 58.8 vs 59.5 and 59.9 in the two prior months. Growth in new orders remains very strong though the index is now under 60, at 59.5, for the first time since December. A key positive, however, and one for the outlook on Friday's employment report is a 1.6 point rise in employment to 56.6 which is strong for this reading.
Capacity stress in this sample is evident with supplier deliveries lengthening very sharply, up 3.0 points to 58.5, and input prices up a half point to a very hot 61.5 for a third straight plus 60 showing.
This report, in distinction to the services PMI released earlier this morning, includes mining, which was the strongest of 17 sectors in the March report, and also construction which includes specific comments on tariff effects, that price volatility for construction-related materials including steel and aluminum are disrupting business plans.
The employment result is strong as is once again the breadth of this report, underscored by the industry score which shows 15 reporting monthly growth and only 2 reporting contraction.