ISM Non-Manufacturing Report Highlights Growth - Sigmanomics

The U.S. services sector grew by 51.6 percent in April. This is up from 50.8 percent in March. It also beat economists’ expectations of a 50.4 percent decline. The services sector makes up more than two-thirds of economic activity in the U.S and is positive for the economy. It shows strength despite tariff pressures. This report is helpful, but the future will depend on many factors. These include the supply chain, consumer demand, and trade policies.

Taking a look at the breakdown of the report, New Orders rose 52.3 percent, displaying a demand for services. Employment index contracted for the second straight month, dipping below 50 percent. Supplier Deliveries registered 51.3 percent, suggesting slower deliveries. The market result was mixed with 10 year treasury yields gaining 4.355 percent while major stock indices opened lower.

While the U.S. service sector indicated growth, the S&P global U.S. services PMI painted a slightly different picture. The S&P report dropped to 50.8 percent in April from 54.4 percent the month prior. This divergence shows varying assessments in the sector’s health.

Key Breakdown of the ISM Services Report (April 2025)

Source: Sigmanomics.com

Of the 18 services industries that were surveyed, 11 reported growth, while 6 contracted. Meanwhile, 1 remained unchanged. This report also has major implications globally.

Higher tariffs may slow cross-border service flows. A stronger-than-expected PMI will support the strength of the dollar. This is a concern as economies with high external debt in dollars will likely face additional stress. Further, oil and industrial metals are poised to witness impacts as global demand expectations recalibrate.

Market participants who want to trade based on this report should pay close attention to these markets