U.S. Review: Reopening Boom, while Supplies Last
- This week’s economic data kicked off with a bang. The ISM Services Index jumped to 63.7, signaling the fastest pace of expansion in the index’s 24-year history. The strong report came with some caveats, however, as the headline was propped up by lengthened supplier delivery times.
- Predictably, given the disruptions along with surging demand, input prices continue to head higher. This morning’s Producer Price Index report showed prices for domestically produced goods and services jumped 1.0% in March, sending the year-over-year rate to 4.2%, the fastest pace in nearly 10 years.
International Review: Global Rebound Gains Momentum, but Pace of Recovery Uneven
- The rise in the global manufacturing and services PMIs for March pointed to an upswing that is gathering momentum but remains unevenly distributed by geographical region. The upturn in manufacturing is reasonably widespread. However, the recovery in services is more variable, with stronger gains in the U.S. and U.K. in contrast to more tepid trends in the Eurozone. On the inflation front, Mexico and Brazil both reported faster inflation for March, which could lead to central bank rate hikes in the months ahead.
- For the coming week, China’s Q1 GDP figures will likely be a market focus. PMI surveys hinted at temporary softness at times during the first quarter, although the momentum appears to have picked up again by quarter-end. That said, the brief pause in the upswing should be enough to see a perceptible slowing in China’s Q1 GDP growth to 1.4% quarter-over-quarter.
Interest Rate Watch: FOMC Minutes Shed Light on What the Committee Is Thinking
- The latest meeting minutes indicated that most FOMC members seem to be placing much more weight on labor market conditions at present, while placing much less weight on inflation.
Credit Market Insights: Consumer Credit Surged in February
- Consumer credit jumped $27.6 billion in February, far exceeding market expectations. Revolving credit (mostly credit card balances) increased $8.1 billion and nonrevolving credit (mostly auto and student loans) rose $19.5 billion.
U.S. Review
Reopening Boom, while Supplies Last
This week’s economic data kicked off with a bang. The ISM Services Index jumped more than eight points to 63.7, signaling the fastest pace of expansion in the index’s 24-year history. The blowout report is just the latest data suggesting the full reopening boom is upon us. All 18 industries reported an increase in March, and the index on current business activity climbed to an all-time high. The new orders sub-index also surged, indicating that the jump in activity was more than just a catchup after last month’s disruptions. The strong survey of purchasing managers came with some caveats, however. Like the manufacturing ISM survey, the headline was propped up by…
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