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Economy in Brief

U.S. ISM Services Index Declines in April
by Tom Moeller  May 4, 2022

• Falloff is greater-than-expected.

• Sub-index movement is mixed.

• Prices strengthen to record high.

The U.S. ISM Services Index fell to 57.1 in April from 58.3 in March, according to the Institute for Supply Management. The figure was below the peak of 68.4 in November of last year. The Action Economics Forecast Survey expected a reading of 58.5.

Haver Analytics constructs a composite index combining the services index and the manufacturing reading released on Monday. This index eased to 56.9 last month from 58.2 in March. These series date back to July 1997.

In the latest services survey, the new orders series declined to 54.6, the lowest level since February 2021. Moving higher was the business activity index to 59.1, the highest level in three months. A greatly improved 37.8% (NSA) of respondents reported higher activity, up from 30.7% in March. A negligible 6.5% reported an activity decline versus 14.7% in March. The supplier delivery series increased to 65.1 (NSA) after falling to 63.4 in March. A lessened 3.8% of respondents reported faster delivery speeds while an increased 64.0% reported slower speeds.

The employment index fell sharply to 49.5 after rising in March to 54.0. A little-changed 24.6% of respondents reported more hiring while 23.1% reported a decline, up from 15.7% in March.

The prices index rose to a record 84.6 in April, up from 83.8 in March and higher than 76.0 twelve months earlier. A record 75.4% (NSA) of respondents reported price increases while 0.2% reported price declines. A reduced 24.4% reported stable prices.

The new export orders index fell to 58.1 from 61.0 in March. The backlog of orders index declined to 59.4 from 64.5, which was the highest level since November. The inventories index rose to 52.3, the highest level since March 2021. The imports index surged to 52.9 in April after falling to 45.0 in March. These series are not seasonally adjusted and not included in the ISM Services PMI total.

The ISM figures are available in Haver's USECON database, with additional detail in the SURVEYS database. The expectations figure from Action Economics is in the AS1REPNA database.

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