Data released on Monday showed (again) better-than-expected US economic numbers. The ISM Services PMI reached a record high at 63.7 in March. According to analysts at Wells Fargo, the jump in the new orders and employment components is indicative of coming activity and suggests the hard-hit service sector is finally gaining some real momentum.
Key Quotes:
“The record high in the ISM Services PMI is just the latest data pointing to an economy starting to boom. The more than eight-point jump to 63.7 follows a pickup in the Markit Services index and medley of services surveys from various regional Federal Reserve Banks.”
“The solid reading does not appear to be a flash in the pan either. The new orders sub-index surged to an eight-month high of 67.2 and indicates the surge in activity was more than just catch up after last month’s disruptions. In another sign the pickup has legs, the employment index leapt 4.5 points to its highest reading in nearly two years.”
“Delays of products are being felt across the whole economy. Not surprising then given the disruptions along with surging demand, input prices continue to head higher. The prices paid index climbed 2.2 points from what was already a 12-year high, in yet another sign of growing inflationary pressure.”
“Our forecast has services spending leading the consumer recovery this year as vaccinations are more widespread and restrictions are further eased. This report was good news for the sector and suggests we are beginning to see momentum take hold after the sector has been constrained for more than a year.”
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