 | The ISM Non-Manufacturing Index was unchanged at 55.4 |
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Implications: The ISM Services index remained at 55.4 in April, its highest level in almost four years. This is the fourth month in a row the index has been above 50, showing the rest of the economy is starting to catch up with the booming manufacturing sector. The business activity index, which has an even stronger statistical link with real GDP growth than the overall index, rose to a robust 60.3. On the inflation front, the prices paid index rose to 64.7, the highest level since Lehman Brothers collapsed. In other news this morning, the ADP Employment Index, a measure of private-sector payrolls, increased 32,000 in April, the best showing in more than two years. We expect the official Labor Department report (to be released Friday) to show a gain of about 185,000 (110,000 for the private sector and 75,000 for government, including Census workers). Yesterday, the National Association of Realtors reported pending home sales (contracts on existing homes) were up 5.3% in March after an 8.3% gain in February. These data suggest a large increase in existing home sales for April. Buyers must settle before the end of June to take advantage of the homebuyer tax credit. In other news from earlier this week, autos were sold at an 11.2 million annual rate in April, slightly below consensus expectations, but up 21% versus a year ago.
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