After last week’s report that showed stronger than expected growth in the manufacturing sector, today’s ISM report in the services sector also showed better than expected growth. While economists were expecting the ISM Non-Manufacturing survey to come in at a level of 54.2, the actual reading came in at 54.5. That’s still near the lows of the last two years, but it does break a streak of four straight monthly declines. On a combined basis and accounting for each sector’s share in the overall US economy, the ISM report for March came in at a level of 54.2, which is below levels seen as recently as January but is the highest reading for 2016.
The table below breaks down this month’s report based on each component of the report. As shown, breadth was strong in March as the only category that showed a m/m decline was Imports. The biggest increases in March came in Export Orders (+5.0), Prices (+3.6), and Business Activity (+2.0). While the m/m figures were strong, though, relative to last year, the majority of categories are weaker with only three increases (Business Activity, Inventories, and Inventory Sentiment).