Why the US Service PMI Was Subdued in April
What Do Recent Indicators Have to Say about the Global Economy?
US service PMI
The US service PMI (purchasing managers’ index) stood at 52.1 for April as compared to 51.3 for March. However, it failed to meet the market expectations of 52.3. In the last two consecutive months, the service PMI showed some improvement, but the business growth remained weaker in the first quarter due to weaker client demand.
Why did business confidence weaken in April?
The manufacturing PMI showed a weaker uptrend in April and failed to meet market expectations as the factory output fell in the month. The service PMI showed a little improvement as compared to the previous month. The stronger US dollar (UUP), the weaker domestic demand due to global (ACWI) (VTI) (VEU) uncertainty, and increased volatility due to the presidential election dragged down the business confidence in April. In 4Q15, the service sector contributed more to the US (VFINX) (IWM) (IVV) economic growth. The US service sector firms are optimistic about the business growth in the next 12-month period. The job growth will pick up in the near future, according to analysts’ forecast.
In the next part, we’ll analyze why the Bank of Japan maintained its status quo in its monetary policy meeting in April.
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