LIVE MARKETS-Services with wince: ISM and S&P Global services PMI

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SERVICES WITH WINCE: ISM AND S&P GLOBAL SERVICES PMI

Friday's jobs report showed 93.4% of all private sector job adds came from the services sector.

So a peek under the sector's hood provides a fairly broad glimpse into the state of the U.S. economy.

The verdict? Services continued to expand last month. Whether it's gaining or losing momentum depends on whom you ask.

The Institute for Supply Management's (ISM) non-manufacturing purchasing managers' index (PMI) USNPMI=ECI unexpectedly added 0.8 point to print at 51.6, defying the 0.6-point dip consensus predicted.

A PMI reading north of 50 indicates monthly expansion.

A closer gander at the index's subcomponents shows new orders gained steam, employment contracted at a shallower pace, and inventories - perhaps reflecting uncertainties around tariffs - jumped 3.1 points to 53.4.

Trump's chaotic trade policies continue to make themselves felt; imports plunged 8.3 points, deep into contraction territory.

Prices paid - an inflation predictor - jumped 4.2 points to 65.1, the component's hottest level since January 2023.

"Concerns over tariffs' impact on prices and changes in federal funding were top of mind," writes Matthew Martin, senior U.S. economist at Oxford Economics. "While business activity and new orders expanded in April, employment declined and hints that policy uncertainty may be feeding into weaker business hiring."

Commentary from survey participants is rife with phrases like "our business is in a state of crisis with uncertainty caused by both the ongoing trade war and the threats to federal funding of programs," "uncertainty remains the dominating theme" and "tariffs are negatively impacting small business customers."

On the other hand, S&P Global's final take on April services PMI USMPSF=ECI, provides a cheerier view of the sector. Its index lost velocity, dropping 2.9 points from March's more robust 53.5 to land at a barely-expansive reading of 50.6.

That's a 0.6-point downgrade from their advance "flash" take released a couple weeks ago.

"Business and consumer facing service providers alike, and especially financial services firms, are reporting markedly weaker growth prospects, citing intensifying uncertainty over the economic outlook amid recent tariff announcements and ongoing federal spending cuts," says Chris Williamson, Chief Business Economist at S&P Global.

S&P Global and ISM indexes differ in the weight applied to their various components.

This shows the extent to which the dueling PMIs' agree (or not). It would appear they are generally on the same page with respect to manufacturing PMI, but they part ways at services:

(Stephen Culp)

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