Today’s release of the ISM Non Manufacturing (Services) index for the month of March came in right inline with expectations (56.5), which sure beats the recent trend of a seemingly endless run of weaker than expected data. On a combined basis (ISM Manufacturing and ISM Non Manufacturing) and accounting for each sector’s weight in the overall economy, the March ISM fell from 56.4 down to 55.9, which was the lowest level since April 2014 (lower chart).
Looking at the internals of this month’s report, the breadth was skewed modestly positive relative to last month. Of the ten sub-components, six rose and four declined. The biggest gainers on the month were Export and Import Orders, while Inventories and Business Activity saw the largest decline. Given the strength of the dollar recently, the big jump in Export Orders to its highest level since February 2013 was a bit surprising. Employment also increased this month, which runs counter to the weakness we saw in last Friday’s employment report. Finally, compared to last year at this time, breadth in the ISM Services components was even stronger as all but Prices are higher now than they were a year ago.