ISM Non Manufacturing: Modest Expansion

Bottom Line: Business activity in the services, construction, and government sectors of the economy accelerated modestly in March, more than expectations. The level of activity has increased with acceleration in new and export orders. Employment increased, confirming last Friday’s moderate gains in jobs report. The ISM Non-Manufacturing Index ROSE by 1.1 points in March to 54.5%, compared with market expectations for a larger increase to 54.2%. That said, this was also the 73rd consecutive month that the non-manufacturing sector has expanded although the current level of the index indicates that the economy is growing only modestly. New Orders rose by 1.2 points to 56.7% as demand expanded for the 74th month. Order Backlogs stayed same for the 3rd consecutive month. Inventories were unchanged for the second consecutive month. Employment grew slightly by 0.6 points to 50.3%. Prices increased by 3.6 points to 49.1%.