TD Securities Global Strategy Team assess the latest ISM Services PMI report from the US.
Supply chains continue to improve
"The ISM services index came in below expectations, dropping by 1.2pp to 51.4 in March (TD: 53.0, consensus: 52.8). The decline was driven by a notable 3.5pt retreat in supplier deliveries, suggesting no issues in the deliveries pipeline as supply chains continue to improve. New orders also retreated by a meaningful 1.7pt to 54.4, which signals less perky demand ahead, all else equal."
"Also notable, the employment component failed to jump back into expansion territory, staying under the 50 mark for a second consecutive month. Moreover, prices paid continued to drop meaningfully in March, with the figure now reaching its lowest level since the early months of the pandemic. If there are any lingering price pressures in the key services sector it is hard to find them in this report."
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