The US is predominantly a services-based economy. This makes the ISM non-manufacturing data particularly interesting. May's figure was released today, printing at 50.3, down from 51.90 for April. This is a five-month low. When the numerical is above 50, companies are experiencing growth and expansion.
The prices component of the survey came in at 56.2. This is down from 59.6 in April. The Fed is worried that services-based inflation is sticky, and this decline may suggest that this type of inflation is aligning more with target.
The Fed is due to release its next rate statement on 14 June, which is likely to indicate a hold. The next CPI release is on Tuesday, 13 June.
Senior Market Specialist
Russell Shor joined FXCM in October 2017 as a Senior Market Specialist. He is a certified FMVA® and has an Honours Degree in Economics from the University of South Africa. Russell is a full member of the Society of Technical Analysts in the United Kingdom. With over 20 years of financial markets experience, his analysis is of a high standard and quality.