US PMI: Supply Chain Issues Hit Manufacturing, Boost Inflation

The U.S. April flash PMI report showed a slightly disappointing reading for manufacturing vs expectations at 60.6; (survey. 61.0, prior 59.1), but services came in above survey at 63.1 (survey 61.5, prior 60.4).

• The composite accelerated to 62.2 (59.7 prior) - a record high since the start of the series in Oct 2009 - amid what the IHS Markit report cited as "looser COVID-19 restrictions and strong client demand".
• The services sector benefited from reopenings from lockdown, but manufacturing production was "weighed down by difficulties sourcing raw materials and ongoing supplier delivery delays, which were the most extensive on record".
• Private sector firms saw a record upturn in new orders (again, related to easing lockdowns), while new export orders rose at a record pace as export markets reopened.
• Firms reported a 6+ year high in work backlogs, and the sharpest rise in employment since Nov.
• On inflation, input costs rose again due to "unprecedented" supply chain disruptions, but eased vs March as service providers saw "softer increases". Though it was the 2nd fastest rise in input prices on record, and output price inflation for both goods and services hit a series high.
• Optimism remained elevated, though below March levels.