ISM, S&P Global print 3 month lows in US services/Inflation down in ISM but make sure to read what S&P Global said

The March ISM services PMI fell by 1.2 pts m/o/m to 51.4 and that was below the estimate of a slight gain to 52.8. That’s a 3 month low and the 2^nd lowest print since May 2023.

New orders were down by 1.7 pts to 54.4 and that puts it just under the 6 month average of 54.7. Backlogs were very weak, down by 5.5 pts to 44.8. No sign yet of inventory restocking as this component fell 1.5 pts to 45.6, the lowest since December 2022.

Employment was up .5 pt but at 48.5 is below 50 for the 3^rd month in the past 4 and follows a below 50 print seen in manufacturing. Only 6 industries are seeing growth in employment and ISM said “Employment challenges remain a combination of difficulties in backfilling positions and/or controlling labor expenses.

Supplier deliveries fell by 3.5 pts to 45.4 (ISM said “Respondents indicated continuing improvement in logistics and the supply chain”) and prices paid were down by 5.2 pts to 53.4, the lowest since March 2020. Though 13 industries out of 18 reported paying higher prices, the same level as in February and off the low last year of 10. And ISM said, “respondents indicated that even with some prices stabilizing, inflation is still a concern.”

Breadth weakened too as 12 of 18 industries saw growth vs 14 in February and 4 reported a contraction vs 3 last month.