Source: Economics Group of Wells Fargo Bank, N.A.
Summary
The ISM Services Index signaled a pickup in activity in February, improving to 53.5 and putting some further distance between it and its manufacturing counterpart. While policy changes seemed to have limited bearing last month on the components feeding into the composite index, concerns over tariffs already appear to be seeping into prices.
Services Sector Remains Strong Even as Tariffs Threaten Prices
Service sector activity seemed to have pushed through the swirl of policy uncertainty coming out of Washington, D.C. in February. The ISM Services Index improved to 53.5 last month. Current activity was little changed over the month with the business activity index down a tick and still comfortably in expansion territory at 54.4. Rather, the improvement stemmed from the employment index, which rose 1.6 points to an 18-month high, and an increase in new orders (+0.9 points).