With 'soft' survey data trending lower (and PMIs mixed), analysts expected this morning's ISM Services data to print higher (catching up to S&P Global's PMI surge in December) and they were right.
ISM Services surged to 54.1 (from 52.1 prior and better than the 53.5 expected)
Source: Bloomberg
However, below the surface things are not so awesome as Prices Paid exploded from 58.2 to 64.4 and employment slipped to 51.4...
Source: Bloomberg
Producers remain challenged by a strong dollar, potential tariffs (Trump Effect) and general uncertainty from dockworkers’ contract negotiations that are set to resume Tuesday.
'Inflation' expectations are at their highest since Feb 2023 - The market is no longer pricing in a full cut by July...
... not at all what Powell and his pals want to see (or maybe it is).
