'Soft' survey data continues to slump into this morning's Services PMIs as Manufacturing PMIs were weak and Regional Red surveys were a disaster (despite still solid labor market 'hard' data)

The S&P Global Services PMI fell from 54.4 to 50.8 (below the 51.4 flash print) in final April data - the lowest since Oct 2023.

The ISM Services PMI rose from 50.8 to 51.6 (well above the decline to 50.2 expected).

So baffle 'em with bullshit is back:

The ISM print was better than all but one expectations...

Under the hood, the picture is not so pretty with Prices Paid at the highest since Jan 2023 (even though New Orders and Employment picked up modestly)...

 “The past relationship between the Services PMI® and the overall economy indicates that the Services PMI® for April (51.6 percent) corresponds to a 1-percentage point increase in real gross domestic product (GDP) on an annualized basis,” according to PMI.

The S&P Global US Composite PMI® fell to 50.6 in April, down from March’s 53.5 and its lowest level since September 2023.

"While tariff announcements mean manufacturing dominates the news, a worrying backstory is developing in the vastly larger services economy, where business activity and hiring have come closer to stalling in April amid plunging business confidence,"  Chris Williamson, Chief Business Economist at S&P Global Market Intelligence warns that:

"Business and consumer facing service providers alike, and especially financial services firms, are reporting markedly weaker growth prospects, citing intensifying uncertainty over the economic outlook amid recent tariff announcements and ongoing federal spending cuts."

"A key area of weakness is slumping exports of services, which is now falling at rate not seen since 2022, but domestic demand is also reportedly waning as confidence slides lower.

But the stagflationary aspects seen in the Manufacturing survey are also showing up in Services...

"Higher prices paid for imports due to tariffs are also driving up service sector firms’ costs, feeding though to higher prices, notably in consumer-facing industries such as restaurants and hotels.

"The resulting bottom line from the services sector is a heightened risk of stalling growth and rising inflation, or stagflation."

Bad enough news for Fed cuts? Or hot enough stagflation to leave Powell on pause for longer?