ISM services softens, even before yesterday's news

Sorry for the delay in writing on this and in light of the very hectic day this is a quick review of the most important things from March ISM services index which fell to 50.8 from 53.5. We all know that the economic world changed again yesterday so this is all old news now anyway.

Ahead of tomorrow’s jobs data, the employment component fell under 50 at 46.2 from 53.9. That’s the lowest since December 2023. Prices paid fell 1.7 pts after rising by 2.2 pts last month, though that will likely inflect back up again in coming months. New orders dropped by almost 2 pts to 50.4, the lowest since June 2024.

In terms of industry breadth, 10 saw growth vs 14 in February.

The bottom line from the ISM, “There has been a significant increase this month in the number of respondents reporting cost increases due to tariff activity. Despite an increase in comments on tariff impacts and continuing concerns over potential tariffs and declining governmental spending, there was a close balance in near-term sentiment, between panelists with good outlooks and those seeing or expecting declines.”

I picked out a few notable quotes: