US: ISM Non-Manufacturing at 20-month low - Wells Fargo

Analysts at Wells Fargo, explained that the ISM non-manufacturing index fell to a 20-month low in March. According to them, the drop is consistent with growth moderating from last year’s solid pace, but at 56.1 suggests the economy continues to expand at a decent pace.

Key Quotes: 

“The ISM non-manufacturing index offers more evidence that the economy is cooling from the torrid pace of last year. The index fell 3.6 points to a one and a half year low. At 56.1, however, the index remains firmly in expansion territory, consistent with the economy continuing to grow, just at a slower rate.”

“The report pointed to slower consumer outlays in Q1, with retail one of only two sectors reporting an outright decline in activity.”

“The business activity and new orders indices softened the most, but remain in the upper 50s. Respondents believe inventories are too high, and the build-up points to inventories boosting Q1 GDP.”