Global PMI - 2025-05-04

US manufacturing PMI falls, services PMI rises. The headline in the media chatter is that the services price index rose to "the highest since January 2023." This is the new locution for making things seem scary -- citing the last time it happened, implicitly assuming that last time had some significance, and exceeding that is therefore newsworthy. And of course the idea now is to suggest that tariffs are causing inflation. Maybe they will at some point, and we will call it as we see it if and when that happens. But in the meantime, it's silly to argue that American consumers are trying to get ahead of tariffs by pushing up demand for all those imported manicures and haircuts they're getting. And, of course, if the price index had fallen, that would be evidence of consumers pulling back because of all the uncertainty caused by the tariffs. Confirmation bias is almost irresistible -- but we all have to try.