Specific data are as follows:

U.S. Markit manufacturing PMI in March preliminary 52.5, a 21-month high, expected 51.8, 52.2 previously. Among them, the preliminary output sub-index value of 54.9, a 22-month high.

U.S. Markit services PMI preliminary 51.7 in March, the second consecutive month of decline, hit a three-month low, expected 52, the previous value of 52.3.

UFC718AE101 The preliminary Markit composite PMI of the United States in March 52.2, a two-month low, expected 52.2, the previous value of 52.5.

Overall, the economy maintained steady growth in the first three months of the year, despite a decline in business activity in March from the previous month. The slowdown in the overall expansion of business activity reflected slower growth in services activity, but manufacturing activity grew at its fastest pace in nearly two years.

A similar story was seen on the demand side, with new orders rising at a slightly slower pace in March. However, the Labour market is as hot as ever, with the outlook for business activity the most optimistic reading since May 2022 and job creation rising to its highest level so far this year.

Meanwhile, inflationary pressures are showing signs of picking up. Input costs rose at the fastest pace in six months, while companies raised prices by the most since April last year.

Commenting on the US PMI data, Chris Williamson, chief business economist at S&P Global Market Intelligence, said:

Output in the US manufacturing and services sectors expanded further in March, rounding off a quarter in which the economy posted its strongest growth since the second quarter of last year. The survey data point to another quarter of strong GDP growth as businesses continue to report increases in new orders, as well as continued hiring.

The most encouraging news comes from manufacturing, where production is now growing at the fastest pace since May 2022. The increase in production was linked to improved demand for goods both inside and outside the United States, contributing to a further pick-up in business confidence about the outlook.

At the same time, service providers expanded at a slower pace than manufacturing, and the growth rate also slowed slightly from February, partly due to ongoing cost of living pressures. However, service providers have also become increasingly optimistic about the outlook, with confidence hitting a 22-month high in March, suggesting that the broad-based economic expansion in March is on track to continue into the summer.

However, a sharp rise in costs, coupled with a recent pick-up in demand that has led to stronger pricing power, meant inflationary pressures intensified again in March. Higher costs due to further wage growth and higher fuel prices pushed overall selling price inflation for goods and services to its highest level in nearly a year.

UFC718AE101 The sharp rise in prices from recent lows in January suggests that consumer prices will face unwelcome upward pressure in the coming months.

With inflation starting to show up again, the latest data isn’t all rainbows and unicorns. That’s not what Fed Chairman Jerome Powell and his fellow doves want.