US ISM: Service sector expansion regains momentum - Wells Fargo

According to analysts from Wells Fargo, the ISM report showed that the service sector is regaining momentum and it shows that prices are still falling, but now at a slower rate.

Key Quotes:

“After three straight months of signaling a slower pace of expansion, the ISM non-manufacturing index improved to 54.5 in March.”

“For the first time in six months, both the ISM manufacturing index and the non-manufacturing index are in expansion territory.”

“The prices component jumped 3.6 points in the month to 49.1. This signals a slower pace of decline in service prices. This is a significant development because over the past three years, services inflation has been consistently outpacing goods prices. In fact, for much of the past two years, goods prices have been falling. A return to 50 or higher for the prices component would be a step in the right direction toward the Fed’s target.”