After the upward surprise in the manufacturing ISM, also the non-manufacturing ISM came out better than expected. In April, the ISM non-manufacturing index rose from 40.8 to 43.7, while the consensus was looking for an outcome of 42.2. The breakdown shows that the improvement was wide spread with increases in new orders (47.0 from 38.8), business activity (45.2 from 44.1), new export orders (48.5 from 39.0), imports (48.5 from 37.0), employment (37.0 from 32.3) and backlog of orders (44.0 from 41.0). Also confidence regarding inventories improved with rises in inventory sentiment (62.5 from 60.0) and inventory change (43.0 from 40.0). Prices paid rose from 39.1 to 40.0. Especially the improvement in new orders is an encouraging sign and raises expectations that the worst might be behind us.
EMU: biggest drop in euro zone PPI since 1996
In March, euro zone PPI data came out broadly in line with expectations. On a monthly basis, PPI dropped by 0.7% M/M, while a decline by 0.6% M/M was expected. The previous figure was upwardly revised from -0.5% M/M to -0.4% M/M. The yearly figure plunged from -1.7% Y/Y to -3.1% Y/Y, the biggest annual drop since EU measurements started in 1996. Looking at the details, the decline was broadly based as only durable consumer goods rose (0.1% M/M). Excluding energy, PPI dropped by 0.4% M/M.
