US Service PMI Surges Near Record High As Margin Pressures Appear

Markit’s US Services PMI soared to 58.4 in April – blowing away the expectations of 55 – just shy of the record high 58.5 seen in March 2012 and early 2010. All sub-indices rose providing just enough comfirmation that all is well in the world.. but one has to ask whether the fastest rise in new work orders in 3 years is sustainable or simply a post-weather bounce. Input prices are up once again though even as output charges dropped – so much for the dream of ever-expanding margins. Is good news bad?

We have seen this level of exuberant activity before… it has not led to follow through…

 

The sub-index breakdown…

 

As Markit notes,

Meanwhile, input price inflation picked up for the second month running and was the fastest since January. Higher cost burdens in turn led to another robust increase in prices charged by service providers during May. That said, the rate of output charge inflation eased since April




via Zero Hedge http://ift.tt/SKEEHv Tyler Durden

Leave a Reply

Your email address will not be published.