ISM chart and excerpts below by permission from the Institute for Supply Management® ISM®
Please consider the March 2024 Services ISM^® Report On Business^®
 emphasis mine.

Economic activity in the services sector expanded in March for the 15th consecutive month. The sector has grown in 45 of the last 46 months, with the lone contraction in December 2022.

The report was issued today by Anthony Nieves, Chair of the Institute for Supply Management^® Services Business Survey Committee: “In March, the Services PMI^® registered 51.4 percent, 1.2 percentage points lower than February’s reading of 52.6 percent. The composite index indicated growth in March for the 15th consecutive month after a reading of 49 percent in December 2022, which was the first contraction since May 2020 (45.4 percent). The Business Activity Index registered 57.4 percent in March, which is 0.2 percentage point higher than the 57.2 percent recorded in February. The New Orders Index expanded in March for the 15th consecutive month after contracting in December 2022 for the first time since May 2020; the figure of 54.4 percent is 1.7 percentage points lower than the February reading of 56.1 percent. The Employment Index contracted for the third time in four months with a reading of 48.5 percent, a 0.5-percentage point increase compared to the 48 percent recorded in February.

“The decrease in the rate of growth in March and the decline in the composite index is a result of slower new orders growth, faster supplier deliveries and a contraction in employment. The report continued to reflect growth month over month. Respondents indicated continuing improvement in logistics and the supply chain. Employment challenges remain a combination of difficulties in backfilling positions and/or controlling labor expenses. The Prices Index reflected its lowest reading since March 2020, when the index registered 50.4 percent; however, respondents indicated that even with some prices stabilizing, inflation is still a concern.”

Manufacturing ISM Inches PositiveOn April 1, I noted Manufacturing ISM Inches Positive After 16 Months of ContractionOn the stronger ISM data the odds of a Fed rate cut in May vanished, and June shrank.
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