April 05, 2021 | 10:24
U.S. Economy .. Open for Business
"We Are Open For Business .... Come On In!"
There were plenty of OPEN signs around the country, as an increasing number of states eased restrictions. And those signs were for retail stores, restaurants, bars, theaters, hair salons, gyms, and so on. So, it should come as no surprise that the U.S. services PMI jumped in March, more than reversing February's setback. But the size of the increase blew consensus out of the water. The headline services PMI surged 8.4 pts (most since last June) to a record high of 63.7 in March.... see Chart 1. (Not even the manufacturing ISM was able to accomplish that... and it hit the highest since December 1983!) New orders and business activity... indicators of future and current activity .... both increased at a double-digit pace (+13.9 pts and +15.3 pts, respectively) to record highs... see Chart 2. Employment made up for February's loss, up 4.5 pts to 57.2, the highest since early 2019. That would've been nice to know before last Friday, but let's be frank .. it would not have prepared anyone for that monster March payroll increase of 916,000. Vendors were still slow in their delivery times, but not by too much versus February. Expect that component to surge in April, thanks to the traffic jam in the Suez Canal.
Every industry covered in the survey reported growth last month, something we haven't seen since early 2019. The comments (which are getting longer by each report) were optimistic, hopeful, yet cautious given that they are also facing the same issues as manufacturers..... supply chain disruptions (weather, ports) and higher prices. The demand > supply issue was mentioned by those in construction, and warned of "building material delays, discontinuations are shortages".
The Bottom Line: The U.S. economy is powering ahead, pumped with vaccines and as it removes the shackles of restrictions. America will be the driver of global growth this year.