May 3, 2023
The following are diffusion indices, based on business surveys, which means that >50 indicates expansion and <50 indicates contraction, and 50 indicates no change. A larger or small number indicates breadth, not intensity, among survey respondents.
ISM Manufacturing Index rebounded +0.8 points in April to 47.1, but remained in its 6th straight month of contraction.
![](https://www.patrickchovanec.com/wp-content/uploads/2023/05/Screen-Shot-2023-05-03-at-10.19.42-AM-1.png)
Manufacturing employment returned to a slightly positive reading, along with customer inventories, but all other subindices remain in contraction.
![](https://www.patrickchovanec.com/wp-content/uploads/2023/05/Screen-Shot-2023-05-03-at-10.20.49-AM.png)
US companies responding to the ISM Manufacturing survey in April reported a complex and challenging picture, with disrupted supply chains still working themselves out, while demand (in some areas, but not others) softens.
![](https://www.patrickchovanec.com/wp-content/uploads/2023/05/Screen-Shot-2023-05-03-at-10.23.33-AM-1.png)
The S&P US Manufacturing PMI rose +1.0 points in April to 50.2, its first expansion reading in six months. However, price pressure also seemed to return.
![](https://www.patrickchovanec.com/wp-content/uploads/2023/05/Screen-Shot-2023-05-03-at-10.26.53-AM-1.png)
S&P’s economists made the following observations:
![](https://www.patrickchovanec.com/wp-content/uploads/2023/05/Screen-Shot-2023-05-03-at-10.30.29-AM.png)
The ISM Services Index covers a broader range of the U.S. economy. It rebounded +0.7 points in April to a still rather tepid 51.9 reading.
![](https://www.patrickchovanec.com/wp-content/uploads/2023/05/Screen-Shot-2023-05-03-at-10.31.55-AM-1.png)
Most subindices are in modest expansion territory. New orders rose +3.9 points in April to 56.1, suggesting more positive momentum going forward (particularly from new export orders, which surged +17.2 points to 60.9). However, upward price pressure remains strong (though significantly diminished) at 59.6.
![](https://www.patrickchovanec.com/wp-content/uploads/2023/05/Screen-Shot-2023-05-03-at-10.34.22-AM.png)
Companies responding to the ISM Services survey in April indicate that inflation and uneven, volatile conditions have made businesses cautious in their outlook.
![](https://www.patrickchovanec.com/wp-content/uploads/2023/05/Screen-Shot-2023-05-03-at-10.39.08-AM.png)
S&P’s US Services PMI rose +1.0 points in April to 53.6, suggesting that the economy is cautiously regaining some momentum.
![](https://www.patrickchovanec.com/wp-content/uploads/2023/05/Screen-Shot-2023-05-03-at-10.41.30-AM.png)
S&P economists see encouraging signs, but also worry that renewed growth could reignite inflationary price pressures.
![](https://www.patrickchovanec.com/wp-content/uploads/2023/05/Screen-Shot-2023-05-03-at-10.43.23-AM.png)
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