PMI Services Index Report Accelerating

PMI services had shown softness compared to other small-sample surveys but strength is now accelerating. Driven by new orders, the PMI held on to its strong mid-month gains with a final score of 55.9 to match the February flash. This is up a very sharp 2.6 points from January.

Capacity stress is now appearing in the sample with backlog orders piling up for a third straight month to a nearly 3-year high. And prices are accelerating, especially input costs which are at a 2-1/2 year high and also selling prices which the report says continue to climb.

Hiring is solid and business optimism is also strong, at a 13-year high. Unsustainable strength is the signal from many private surveys, still in contrast to actual data from the government where strength is much less severe.