Release Explanation: Similar to the PMI numbers, it surveys Purchase Managers on their sentiment on orders, hiring, inventories, and deliveries. Split into the Service Index (above), and then Service Prices which look at the rate of Inflation when materials and services are purchased. Builds an economic picture of the strength of manufacturing activity ahead of official Government reports. These numbers usually are a pre-cursor to the PMI numbers later in the month. A currency can be very reactive to these numbers as over time they have been a reliable read on Government reports to come.
Trade Desk Thoughts: The service sector of the economy contracted for a sixth straight month in March and at a faster pace, the Institute for Supply Management said today. The non-manufacturing index fell to 40.8 from February's reading of 41.6. Economists had expected the index would rise to 41.9.
Real Estate, Rental & Leasing was the only industry group to report expansion for last month. Wholesale trade showed the sharpest decline for a second straight month.
Within the sub indexes, business activity/production and new orders contracted at a slower pace, while employment, which has now contracted for 11 straight months, contracted faster.
Prices and new orders decreased at a faster pace as did new export orders and imports. Businesses still said their inventories were too high.
Producers noted that some inflation in commodities was being seen and that healthcare was seeing a slowdown in volume. Respondents from the Transportation & Warehousing sector said we are definitely feeling the recession in terms of business activity on all fronts.
Forex Technical Reaction: Stocks declined after the report was released and the dollar made some headway against the higher-yielding euro, pound and A$.