The ISM non-manufacturing index rose to 57.8 in April and suggests that the Q1 slowdown in GDP should be temporary. Hiring remained strong over the month, and new orders rose at a faster pace.
Moderate Growth to Continue
- Activity outside of the manufacturing sector expanded at a faster clip in April, with the ISM non-manufacturing rising 1.3 points. At 57.8, the index suggests that, despite a weak Q1 GDP print, the economy is trending at a moderate pace.
- The business activity index rose to its highest mark since November, while a rise in new orders suggests the pipeline remains strong.
Trend in Employment Remains Strong
- The employment index came in at 56.7 and has indicated little change in the trend rate of employment growth over the past few months. While the ISM manufacturing index indicated factory sector employment fell in April, we look for a solid bounce back in payroll growth in Friday’s employment report.
- Inflation pressures look to remain muted. The prices paid index fell to 50.1, a shade above its six-month average of 50.4.
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