【Zillow】Zillow Market Pulse: April 3, 2020

The March jobs report was the latest in a string of depressing data releases, and even so likely underestimates the damage still to come. Typically lower-paying sectors suffered the most damage, with leisure and hospitality taking the biggest blow. And activity in the U.S. service sector – about 80% of the economy – is now firmly in decline.

The headline service-sector reading from March wasn’t as bad as some expected, but make no mistake: Activity in the services industries has slowed considerably in recent weeks. Much like it’s relative that measures the manufacturing sector, the headline ISM Services index was buoyed in March due to constraints in supply chains. Normally, this might suggest a surge in healthy consumer demand, but nowadays it is more indicative of straining global distribution networks and, perhaps, people hoarding some materials. The ISM non-manufacturing index of business activity fell to its lowest reading since July 2009, and the IHS Markit U.S. services index fell by more in one month than it ever has. And, again, the worst is likely still to come. Responses to the IHS survey were collected between March 12th and March 27th, before some state-level stay-at-home measures were implemented.

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