🇺🇸❗️Cable FX Macro Weekly Note: ISM May PMI

**As seen in Risk In The Week report 05/30/25, get full access now! cablefxm.co.uk

The Manufacturing PMI contracted for the second consecutive month, indicating a slowdown in manufacturing activity after two months of expansion in January and February 2025. A PMI below 50 signals contraction, while above 50 indicates expansion. Despite the contraction, the April reading of 48.7 was slightly better than the consensus estimate of 48.0, suggesting a less severe decline than anticipated. The Services PMI expanded for the 10th consecutive month, marking the 56th expansion in 59 months since the post-COVID recovery began in June 2020. The April reading of 51.6 was above the consensus estimate of 50.3, indicating stronger-than-expected growth in the services sector, a major driver of the U.S. economy. One key highlight in the sub-indices for the non-mfg survey was the rise in prices paid, the gauge jumped to 65.1 from 60.4, the highest since January 2023, reflecting significant inflationary pressure in services.

Economists at Wells Fargo expect the manufacturing survey to pick up in May but to remain in contraction territory, they noted that Fed regional surveys show a pullback in new order and employment. For the services gauge, Wells Fargo is said to be focused on the prices paid component as inflation pressures seem to be re-emerging, they penciled the headline rising to 52.3 in May.