Strong Beat In March ISM Services PMI Sends Index To Record High

US services activity in March rose to a pandemic high as the March ISM Services PMI printed at 63.7, strongly exceeding the forecast of 59. The print is the ISM Services PMI’s highest on record since its component data began to be collected in 1997. In February, the Services PMI fell to its lowest level since May of 2020 as extreme weather prevented typical services activity. March’s resurgence reflects that February’s dip was not the beginning of a downtrend and instead shows continued strength from the US economy.

ISM, ISM Services, ISM Services PMI

Services activity accounting for around 75% of US GDP, and the Services PMI serves as an important proxy for GDP data, giving markets a closer and more timely look at this key component of the US economy. PMI prints above 50 denote an expansion and below 50 denote a contraction.

Other components of the ISM report were similarly strong. Business Activity, Employment, New Orders, and Prices all rose notably compared to their previous month’s prints. The prices component in particular hit its highest level since 2008, when high energy prices drove inflation readouts upward. The accompanying press statement from ISM notes that respondents cited higher demand and increasing optimism despite supply chain difficulties and remaining uncertainty.

US NON-MANUFACTURING REPORT (INSTITUTE FOR SUPPLY MANAGEMENT) – MARCH 2021

DailyFX, DailyFX Economic Calendar, Economic Calendar, ISM

DailyFX Economic Calendar

March’s strong Services prints are further signs that the US economic recovery is continuing to strengthen. March’s ISM Manufacturing report saw manufacturing PMIs hit their highest level since 1983 as respondents across the board reported increased demand and activity. Nonfarm payrolls for March rose by 916k, their strongest increase since the summer. The Biden administration’s American Rescue Plan Act is beginning to impact the economy, providing a further boost to growth. With vaccination efforts continuing strongly, the US looks positioned for a strong H2 2021.

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