Out of Sync: Another Soft ISM Print Despite Solid Job Report

Wells Fargo Research Team Wells Fargo

Expansion in the services sector slowed in April according to the latest ISM non-manufacturing index, which fell for a second straight month to 55.5, the lowest number for this key gauge since August 2017

Curiously Out of Step

Any number above 50 still signals expansion, but things have certainly cooled off since the non-manufacturing ISM hit a 13-year high of 60.8 back in September.
Taken together with Wednesday’s report that the manufacturing ISM slipped to more than a 2-year low of 52.8, survey data indicate a slowing that is curiously out of step with the solid jobs report & firmer consumer spending reported earlier this week

Take Today’s Jobs Report with a Grain of Salt?

Most sub-components of the index fell, with prices paid dropping 3.0 points, and both orders and order backlogs falling as well.
In perhaps the most glaring example of variation between hard and soft data, the employment component of today’s ISM nonmanufacturing showed a 2.2 point decline to 2-year low of 53.7 just 90 minutes after the Labor Department reported job growth for the same month that beat even the highest published forecast.

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Wells Fargo Research Team

Wells Fargo

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