Last Updated: April 21, 2023 at 10:14 a.m. ET
First Published: April 21, 2023 at 10:08 a.m. ET
The numbers: An early reading of the U.S. economy in April from S&P Global showed that business activity has escaped the doldrums after struggling over the fall and winter months.
The S&P Global U.S. service sector purchasing managers index rose to 53.7 in April from 52.6 in the prior month. This is a 12-month high.
The flash U.S. manufacturing…
The numbers: An early reading of the U.S. economy in April from S&P Global showed that business activity has escaped the doldrums after struggling over the fall and winter months.
The S&P Global U.S. service sector purchasing managers index rose to 53.7 in April from 52.6 in the prior month. This is a 12-month high.
The flash U.S. manufacturing sector PMI rise to 50.4 from 49.2 in March.
Any number above 50 points to expansion. This is the first time that the manufacturing index has been above 50 in six months.
Economists surveyed by the Wall Street Journal had expected manufacturing to sink to 49 in April and for services to weaken to a 51.5 reading.
The results are based on polls of senior executives in charge of buying supplies for their companies.
Key details: Greater employment and stronger demand supported the gain in services in April. At the same time, the pace of cost inflation rose. Service employment had the fastest rise since July 2022.
The upturn in manufacturing was supported by stronger growth in output and employment. New sales rose only slightly.
Big picture: The S&P Global surveys are among the first indicators each month to assess the health of the economy.
The economy is showing mixed signals. Minutes of the meeting of the Federal Reserve interest-rate committee in March show the central bank’s staff now expect a recession this year.
Economists will be looking for confirmation of the upturn in the closely-followed ISM factory sector index for April that will be released in 10 days. The index contracted in March for the fifth straight month, falling to 46.3% from 47.7% in the prior month.
What S&P said: “The latest reading is indicative of GDP growing at an annualized rate of just over 2%,” said Chris Williamson, chief business economist at S&P Global
Market Intelligence.
Market reaction: Stocks
DJIA
were lower at the start of trading session. The yield on the 10-year Treasury note
TMUBMUSD10Y
rose to 3.56%.
