Home US ISM Non-manufacturing: Don’t expect a repeat performance in March – Wells Fargo
FXStreet News

US ISM Non-manufacturing: Don’t expect a repeat performance in March – Wells Fargo

Data released on Wednesday showed the ISM Non-manufacturing rose to the highest level in a year to 57.3 in February. According to analysts at Wells Fargo, the data shows that economic activity was strong before concerns about COVID-19 intensified. They warn March numbers won’t be as good as February. 

Key Quotes: 

“The ISM non-manufacturing index bucked expectations for a modest pullback in February, instead jumping 1.8 points to 57.3. The pickup mirrored the increase in regional service-sector surveys conducted by a number of Federal Reserve Banks, but has now diverged sharply from the Markit Services PMI, which fell to more than a six-year low in February.”

“The ISM non-manufacturing corollary to the Markit headline and one component of the composite index, the business activity index, fell more than three points in February, but remained firmly in expansion territory at 57.8. Driving the ISM non-manufacturing index higher over the month was a surge in new orders (up nearly seven points to a 20-month high of 63.1) and a pickup in hiring activity. The forward looking nature of both those components suggests that broad economic activity at least had some momentum heading into March and the recent bout of volatility in financial markets.”

“Concerns about sourcing due to the coronavirus were still evident in the survey, although skewed toward the goods sector or industries most directly in the crosshairs of the outbreak (…) We still expect to see some more discernable effects of the economic costs of trying to contain the coronavirus, however, in the next few months.”

“We will be watching the ISM non-manufacturing index closely for signs that the economic impact of the virus has extended beyond a supply shock to demand.”
 

FX Street

FX Street

FXStreet is the leading independent portal dedicated to the Foreign Exchange (Forex) market. It was launched in 2000 and the portal has always been proud of their unyielding commitment to provide objective and unbiased information, to enable their users to take better and more confident decisions.