US services sector continues to carry load

The April ISM services index rose to 51.6 from 50.8 and better than the estimate of a dip to 50.2 and compares with 53.5 in February and 52.8 in January. For perspective, the 6 month average is now 52.5.

The Business Activity component though fell to 537 from 55.9 and that is weakest since June 2024. ISM said "We are seeing a more conservative approach both domestically and internationally as a result of the current US policies" and "People rushing to purchase vehicles in advance of the tariffs."

New orders fell 1.8 pts in March and rebounded by 1.9 pts in April. Backlogs rose a touch but remained below 50 at 48 vs 47.4 in the month before. Employment was under 50 for a 2^nd month but less so at 49 vs 46.2 in March. Eight industries reported growth in employment and eight saw a reduction.