ISM services remains above expansion level of 50 with concerns over tariffs rising.
ISM is a diffusion index with numbers above 50 indicating expansion and below 50 contraction.
A weakness of diffusion indexes is direction matters more than amount. For example, a business hiring 2 people would offset a business firing 300.
Please consider the April 2025 Services ISM® Report On Business® emphasis mine.
ISM®’s Business Activity Index registered 53.7 percent in April, 2.2 percentage points lower than the 55.9 percent recorded in March, a 59th straight month of expansion. The Business Activity Index has been in expansion territory since its coronavirus pandemic lows. Comments from respondents include: “We are seeing a more conservative approach both domestically and internationally as a result of the current U.S. policies” and “People rushing to purchase vehicles in advance of the tariffs.”
Prices
Prices paid by services organizations for materials and services increased in April for the 95th consecutive month. The Prices Index registered 65.1 percent, 4.2 percentage points higher than the 60.9 percent recorded in March. The April reading is the index’s highest since January 2023 (65.8 percent), as well as its fifth consecutive month above 60 percent and the 30th in a row below 70 percent.
Seventeen of the 18 services industries reported an increase in prices paid during the month of April, in the following order: Wholesale Trade; Mining; Construction; Other Services; Information; Real Estate, Rental & Leasing; Agriculture, Forestry, Fishing & Hunting; Retail Trade; Transportation & Warehousing; Professional, Scientific & Technical Services; Finance & Insurance; Accommodation & Food Services; Public Administration; Utilities; Educational Services; Management of Companies & Support Services; and Health Care & Social Assistance. The only industry reporting a decrease in prices paid in April is Arts, Entertainment & Recreation.
Respondent Comments
- “Sales and traffic have improved on track with year-over-year seasonal trends. We seem to be outperforming some of the publicly traded restaurants reporting results.” [Accommodation & Food Services]
- “Tariffs are negatively impacting small business customers. Many small business customers source their products from China. They cannot afford to compete in the marketplace sourcing from other countries. We could not move products fast enough to beat the tariff starting dates.” [Agriculture, Forestry, Fishing & Hunting]
- “Business is steady.” [Construction]
- “There is great concern at my institution (medical school with a research institute and hospital) that changes from the current administration will severely and adversely affect many of the populations we are trying to help live healthier lives.” [Educational Services]
- “We are actively reviewing the impact of tariffs. We are seeing some vendors increasing their prices, and we are actively pushing back on those increases. We expect our vendors to honor our contracted pricing.” [Health Care & Social Assistance]
- “Generally, pricing is lower, but there is some uncertainty of actual, final costs due to tariffs.” [Other Services]
- “Our business is in a state of crises with uncertainty caused by both the ongoing trade war and the threats to federal funding of programs.” [Public Administration]
- “Uncertainty remains the dominating theme as the U.S. government has been maddeningly inconsistent with tariff implementation.” [Real Estate, Rental & Leasing]
- “Tariffs and concerns about government grants still impacting our procurement operations. Some projects are slowing or being held off to ensure we have funds to complete the current work.” [Transportation & Warehousing]
- “The tariff uncertainty is causing a lot of consumption of human capital. We are starting to see some tariff charges, some are significant given the price of the highly specialized units that were ordered over two years ago. Based on our spend over the last couple of years, we will have to adjust our capital and operations and maintenance plans.” [Utilities]
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There was a “Project for a New American Century” Document by NEOCONS (emphasis on CON)… or some other scammer that laid out these plans for today’s misery:
“Statement of Principles
It described the United States as the “world’s pre-eminent power”, and said that the nation faced a challenge to “shape a new century favorable to American principles and interests.” “
PNAC. after fall of USSR the bushcrime family neocons started that think tank. they wanted a new enemy. i read their white papers, in the 90s. they wanted a new pearl harbor and thought saddam was a great boogie man. on the morning of 9.11.01, even though i knew dozens of childhood friends in the towers at cantor………i exclaimed to my nephew, “it was christmas morning for the bush crime family”. only other guy i knew who got it had been a green beret, special ops, in the caves with mujahadeen when they were our allies in afghanistan against the USSR.
My mom has a friend who for many years has scraped by, by importing a useful pet item from China and selling it online. Just before the election her business finally went under; there were just no sales. Now she is working part time as a home companion, in order to survive. She would prefer to be reselling stuff, but her current work is a better use of her time; it keeps old people out of nursing homes.
I’m glad she was able to find something helping others. The US will need countless more home companions and caregivers. My brother who is a nurse says that we don’t have a healthcare crisis but rather a custodial care crisis.
Prices:
– Prices paid by services organizations for materials and services increased in April for the 95th consecutive month.
> Thats “7 Years” of consecutive Increases. That’s the direct result of “Inflation”
Respondent Comments:
– “Sales and traffic have improved on track with year-over-year seasonal trends. > Excellent.
– “Tariffs are negatively impacting small business customers. Many small business customers source their products from China. They cannot afford to compete in the marketplace sourcing from other countries. > Unfortunately that’s the cost of doing Business. Sounds as a company, and perhaps many, didn’t have back up availability. They never sold products with multiple sources. Bad management for this reason alone, but price hikes, obsolete parts etc. just add to the nightmares that await this behavior.
– “Business is steady.” [Construction] > Excellent.
– “We are actively reviewing the impact of tariffs. We are seeing some vendors increasing their prices, and we are actively pushing back on those increases. We expect our vendors to honor our contracted pricing.” > Excellent.
– “Generally, pricing is lower, > Excellent.
– “Tariffs and concerns about government grants still impacting our procurement operations. Some projects are slowing or being held off to ensure we have funds to complete the current work.” [Transportation & Warehousing] > Dealing with it well.
– “The tariff uncertainty is causing a lot of consumption of human capital. We are starting to see some tariff charges, some are significant given the price of the highly specialized units that were ordered over two years ago. Based on our spend over the last couple of years, we will have to adjust our capital and operations and maintenance plans.” [Utilities] > Dealing with it well.
Stagflation – as far as the eye can see.
Keep up the great reporting Mish. It is indeed a slow motion train wreck and the American economic train is about to get derailed. 100% Trump/GOP fault. 100%
If only we had Biden and Kamala to save us!
if only we had a stable economy with stable leadership…. Sleepy Don is gonna sink everyone.
We have a Leader who Leads the economy? What?
yes, either would be much better as crappy as they are.
there’s a difference between “things could be a lot better” and dousing it all in gasoline and setting it on fire as a solution to problems.
Not 100%, but plenty Trump/GOP fault. I’d go back at least to 1990-1991 when the US saw the collapse of the Soviet Union not as a fortuitous time and start of an actual peace dividend but as an opportunity to try to run the entire world. Clinton started expanding NATO against a non-existent threat. Bush the Younger started a $7-9 trillion boondoggle in Afghanistan and Iraq. He also made formal the already-planned goal of making the Black Sea a “NATO lake” by enrolling Ukraine and Georgia. Ongoing Anglosphere perfidy continues to this day with the imprisonment of Imran Khan for daring to buy oil from Russia and the recent attack in Kashmir – attempting to embroil India in problems for the crime of daring to act like an independent country with respect to BRICs, energy purchases and trying to get along with China. Were the 2020-2021 lockdowns, censorship and growth of the security state merely an overreaction to a relatively benign virus or the end goal for which the virus was created? Yes.
Why stop in 1990, go back to 1492, that’s when the real problems started.
How was 1492 a problem? Are you a Native American?
You seem like a hater of America
You want to know who hates America Matt?
Your MAGA cult and your orange messiah are America haters.
https://www.nbcnews.com/politics/trump-administration/trump-asked-uphold-constitution-says-dont-know-rcna204580
As a hater of America, you don’t matter.
You make a good point, MPO. I had to draw the line somewhere. We did steal the land from the Indians, but at least they got firewater and – eventually – furnaces and indoor plumbing. Wigwams are a little rough at -25F. I could also have gone back to September 18, 1947.