S&P Global US April flash services PMI 53.7 vs 51.5 expected | Forexlive
- Prior was 52.6
- Manufacturing 50.4 vs 49.0 expected
- Prior manufacturing was 49.2
- Composite 53.5 vs 52.3 prior
- New orders increased at the sharpest rate for 11 months
- The services rate of inflation increased at a sharper pace.
- Services business confidence was the 2nd highest in a year
- Full report
“Improved marketing initiatives, greater domestic demand and the acquisition of new customers were reportedly behind the latest uptick in new orders,” for the services sector, according to S&P Global.
Commenting on the US flash PMI data, Chris Williamson, Chief Business Economist at S&P Global Market Intelligence said:
“The latest survey adds to signs that business activity has regained growth momentum after contracting over the seven months to January. The latest reading is indicative of GDP growing at an annualized rate of just over 2%.
“Growth is also reassuringly broad-based, led by services thanks to a post-pandemic shift in spending away from goods, though goods producers are also reporting signs
of demand picking up again.
“Jobs growth has accelerated alongside the resurgence of demand, aided by reports of vacancies being more easily filled, reflecting improved supply of candidates and higher wages.
“However, the upturn in demand has also been accompanied by a rekindling of price pressures. Average prices charged for goods and services rose in April at the sharpest rate since September of last year, the rate of inflation having now accelerated for three successive months. This increase helps explain why core inflation has proven stubbornly elevated at 5.6% and points to a possible upturn – or at least some stickiness – in consumer price inflation.”
That doesn’t sound like an economy on the brink of a recession. This is bad news for bonds and a buying signal for USD/JPY as the market may have been too eager to price in an end to the rate-hiking cycle.