US ISM Services PMI from 50.8 rose to 51.6 in April, beating expectations of 50.6. The gain was driven by stronger new orders, which rose from 50.4 to 52.3.

However, business activity slipped to 53.7 from 55.9. Employment rebounded from 46.2 to 49.0, but stayed in contraction territory for the second consecutive month.

The most notable development was the sharp jump in the prices index—from 60.9 to 65.1—the highest since January 2023.

Overall, the data point to modest economic growth, with ISM estimating a 1% annualized GDP expansion based on the services reading.

Full US ISM services release here.

US ISM Manufacturing PMI edged lower from 49.0 to 48.7 in April, slightly better than expectations of 47.9, but still firmly in contraction territory.

The report paints a mixed picture beneath the headline: new orders improved modestly from 45.2 to 47.2, signaling tentative stabilization in demand. But production dropped sharply from 48.3 to 44.0, marking the eighth straight month of contraction. Employment remained weak, rising only slightly from 44.7 to 46.5, with job losses continuing across the sector.

Export activity was a particular drag, with new export orders plunging from 49.6 to 43.1, reflecting growing external headwinds and perhaps early signs of tariff impacts. Imports also fell back into contraction, dipping from 50.1 to 47.1.

The rise in the Prices Index—from 69.4 to 69.8—marks the highest level since mid-2022 and reflects growing cost pressures, especially from tariffs, which are now being passed through to buyers amid longer supplier delivery times and rising inventories.

According to ISM, the overall backdrop suggests weakening demand and output amid rising input costs, “not considered positive for economic growth. ISM estimates the current PMI level aligns with a modest 1.8% annualized GDP growth rate.

Full US ISM manufacturing release here.

US initial jobless claims rose 18k to 241k in the week ending April 26, above expectation of 221k. Four-week moving average of initial claims rose 5.5k to 226k.

Continuing claims rose 83k to 1916k in the week ending April 19, highest since November 13, 2021. Four-week moving average of continuing claims rose 6k to 1868k.

Full US jobless claims release here.

US core PCE price index, Fed’s preferred inflation gauge, came in flat on a monthly basis in March, undershooting expectations of 0.1% mom rise. Headline PCE index was also flat, matched expectations.

On a year-over-year basis, core PCE inflation eased from 3.0% to 2.6%, offering some reassurance that underlying price pressures are gradually moderating. Headline PCE inflation also slowed from 2.7% to 2.3% yoy, slightly above expectation of 2.2%.

Meanwhile, consumers continue to spend. Personal income rose 0.5% mom, outpacing forecasts of 0.6% mom. Spending jumped 0.7% mom above expectation of 0.6% mom, led by solid increases in both goods and services.

Full US Personal Income and Outlays release here.

The US economy unexpectedly contracted in the Q1, with GDP shrinking at an annualized rate of -0.3%, marking the first decline since Q2 2022 and falling well short of expectations for modest 0.4% growth.

The surprise contraction was driven by a surge in imports and a pullback in government spending, which more than offset gains in investment, consumer spending, and exports.

Compounding the disappointing headline figure, inflation pressures showed renewed strength. The GDP price index jumped to 3.7% yoy, significantly above the 3.1% yoy forecast and accelerating from 2.3% yoy in Q4.

Full US GDP release here.