US service sector accelerated well above expectations in April – PMI

The data released on Monday showed that growth in US services sector accelerated in April, driven by rise in orders and prices paid by businesses for materials and services, which spiked to the highest in over two years.

The ISM non-manufacturing purchasing managers index (PMI) jumped to 51.6 in April from 50.8 previous month and strongly beat consensus at 50.2.

The indicator stays above 50 threshold which divides growth from contraction since February 2024, indicating that services sector, which accounts for more than two-thirds of the economy, remains in good condition and tends to grow.

In addition to new orders and prices paid, the report also pointed to solid job growth in April that adds to signals that the economy was resilient and still far from recession threats, signaled by recent data showing GDP contraction in the first quarter.

However, economists remain very cautious and warn of consequences of trade tariffs, expected to see the biggest hit by summer.