According to the Institute for Supply Management’s Services Purchasing Managers’ Index report, activity for April came in slightly below expectations with the headline index at 53.6% versus the 53.7% consensus (54.0% prior). A value above 50% reflects expansion in the services sector. The New Orders Index was 53.5% (60.6% prior), signaling continued but slowing demand growth. The Employment Index slightly improved to 48.0% (45.2% prior), suggesting sluggish service-sector hiring. The Prices Paid Index came in at 70.7%, unchanged from last month, a sign that cost pressures remain elevated.
The ABA Office of the Chief Economist believes the Services PMI Report suggests continued strength in the services sector and overall U.S. economic activity and growth. Continued expansion could support commercial and industrial lending, particularly among service-oriented small and midsize businesses. Prices continue to rise but less than anticipated, and new orders have cooled while remaining above 50, together suggesting that buyers are increasingly hesitant to lock in future demand.
