The short story, from Reuters:
The Institute for Supply Management said its monthly non-manufacturing index, which measures the services sector of the economy, jumped to 63.0 in April from 60.5 in March. Also, the U.S. Commerce Department said U.S. factory orders jumped 4.2 percent in March.
The news was greeted as more evidence that economy is on pretty solid footing...
"The economic data, especially the ISM non-manufacturing gauge, was stronger than expected and seemed to suggest that the economy began the second quarter with a lot of upward momentum," said William Sullivan, chief economist at JVB Financial Group.
... and that maybe certain important people have got it all wrong:
"The slowdown in the economy the Fed's been predicting isn't underway yet, judging from today's reports,'' said Stuart Hoffman, chief economist at PNC Financial Services Group Inc. in Pittsburgh and a former Fed analyst...
"We certainly aren't seeing any signs of slowing yet, are we?'' said Michael Feroli, an economist at JPMorgan Chase & Co. in New York.
Those passages come courtesy from the folks at Bloomberg, and there was more rhapsodic sentiment about the pace of economic growth elsewhere. From FXstreet.com, for example, on the orders report...
"The manufacturing sector is quite robust currently, with no evidence of an imminent slowdown,'' said Stephen Stanley, chief economist at RBS Greenwich Capital. "If the economy is going to cool going forward, the impetus will have to come from the consumer side, not from businesses," he concluded.
... and from CNNMoney, on the ISM data:
"The number was very strong, almost too hot to touch," said Patrick Fearon, senior economist at A.G. Edwards & Sons. "It looks as if the service side of the economy strengthened across lots of subindexes."
But the ISM report did have its dark cloud. From the Wall Street Journal:
"Members' comments in April are mostly positive concerning current business conditions, with a number of them indicating that this month's faster rate of increase of inventories is due to increased business or the expectation of increased business activity," said Ralph Kauffman, who directs the survey for the ISM.
But he added, "price increases have again become a significant area of concern for many members as a result of recent fuel price increases."
That certainly contributes to this sentiment, from the aforementioned Reuters piece:
"That raises the possibility that (Fed Chairman Ben) Bernanke can't pause at the June policy meeting. A strong economy in April against a backdrop of rising commodity prices suggests that the market will have to allow for a 5.25 percent federal funds rate in its pricing mechanism."
... seconded by the Mr. Feroli quoted in the aforementioned Bloomberg article...
"It's going to require a fair amount of confidence in their forecast that things will slow for the Fed to pause, but there's still a lot of time left between now and the end of June.''
... and at MarketWatch:
"We believe that a combination of no sign of any moderation in growth, along with rising inflation pressures, will push the Fed to raise rates at both next week's and the June 29th FOMC meetings, and to deliver another quarter-point rate hike in the third quarter," said the economic team at Bear Stearns.
I can't wait for the employment report.