Latest U.S. March ISM non-manufacturing PMI index shows a rise of 54.5 in March, beating the 53.0 forecast from briefing.com and ahead of 53.4 in February.
Meanwhile, the latest PMI data released from Markit shows that business activity returned to expansion, but new order growth slipped to a post crisis low.
The final U.S. Composite Markit PMI Output Index came in at 51.3 in March, up from 50.0 in February, signaling a return to growth for the overall U.S. private sector activity.
But the average index reading in Q1 2016 was 51.5, the weakest level for any quarter since Q3 2012 when the reading was 51.3.
The seasonally adjusted final market U.S. Services Business Activity Index came in at 51.3 in March, up from 49.7 in February.
The latest reading was still the second lowest since October 2013 and pointed to marginal improvement in the service sector output. The average for Q1 2016 was 51.4, marking the weakest expansion of business activity since Q3 2012.
Optimism about the business outlook dropped to a post crisis low.
“The welcome news of sustained robust hiring in March, as indicated by both the PMI surveys and non-farm payroll numbers, masks a more worrying picture of a further slowing in economic growth so far this year. The survey data, which have historically provided a reliable guide to official GDP numbers, suggest the annualized pace of economic growth weakened to 0.7 percent in the first quarter” said Chris Williamson, chief economist at Markit.
“Demand is growing at the slowest rate since late 2009 and, with business optimism also sliding to its weakest since the recession, firms clearly expect worse to come. Firms are worried about a potential weakening of demand both at home and abroad in the face of various headwinds. As such, the data support the cautious approach to policy tightening currently advocated by Fed Chair Janet Yellen” Williamson added.