ACTV - U.S. Service Sector Price Pressures Cool As Activity Slows
2024-04-03 14:45:00 ET
Summary
- The March ISM services index was weaker than predicted while price pressures moderated to four-year lows.
- With employment remaining in contraction territory this report should boost the case for interest rate cuts, but the breakdown in the relationship with official data means the Federal Reserve will remain wary of moving too soon.
- The details show business activity holding steady at decent levels, but new orders cooled below the six-month average while employment remains in contraction territory as the backlog of orders fell markedly.
ISM reports cooling activity and inflation in the service sector
The March ISM services index is weaker than expected, falling to 51.4 from 52.6 and coming in below the 52.8 consensus. Out of the 52 forecasts submitted to Bloomberg, only one person predicted anything weaker than this outcome - remember that vehicle sales (yesterday) came in below everyone's expectations and construction spending (Monday) came in below everyone's expectations, but the strength in the ISM manufacturing survey has dominated the commentary and market direction since its release Monday morning....
U.S. Service Sector Price Pressures Cool As Activity Slows