ISM services index ticks higher in April
Activity in the US services sector improved more than expected in April, according to figures released on Wednesday.
The Institute for Supply Management's index of non-manufacturing rose to 57.5 from 55.2 the month before, beating expectations for a reading of 55.8.
Meanwhile, the non-manufacturing business activity index increased to 62.4 from March's reading of 58.9, reflecting growth for the 93rd consecutive month.
The new orders index printed at 63.2, up 4.3 percentage points from March, while the employment index fell to 51.4 from 51.6.
Pantheon Macroeconomics said the the headline "looks great", recovering all but 0.1 points of the March drop, which it reckons was due to the severe weather across the northeast.
"The business activity and orders indexes jumped too, with the latter rising 4.3 points to 63.2, the highest since August 2005. But these gains are not reflected in the key employment component, which dipped by 0.2 points to 51.4, following its 3.6-point decline in March. At this level, the index is consistent with payroll growth of only about 75K. For now, we are inclined to think the weakness is temporary, given the strength in the other indexes, but it needs to recover, and soon.
"In the meantime, it makes us nervous about our 250K forecast for Friday's April payroll number; the risk now seems to be to the downside."