The incoming macro data’s not going to tell us a consistent story. Maybe we should stop consulting it.

Under the circumstances, a cool read on ISM services Tuesday might’ve been just what the doctor ordered to the extent an underwhelming print had the potential to allay concerns that much like early 2023, the US economy’s running too hot for comfort in the context of the Fed’s efforts to restore price stability.

Although the ISM headline did miss, the undershoot was trivial and the subindexes sent conflicting signals. Specifically, the business activity and new orders gauges picked up, while the employment component slipped into contraction territory. 52.6 on the headline was just short of the 53 consensus.

Meanwhile, the final read on S&P Global’s services gauge for February was revised higher, to 52.3 from 51.3 in the flash release.

Nothing here points to recession, even as the sub-50 print on the ISM employment index might be viewed as a canary if you’re determined to find one. The S&P Global color described “a further rise in new business” last month, when sales volumes “sustained” recent increases and new orders “expanded for the fourth month running.” ISM’s Anthony Nieves said most panelists are “positive about business conditions.”

Traders were closely eyeing the ISM prices gauge after a sharp increase in January. Mercifully, it receded to 58.6, down meaningfully from 64, albeit still indicative of pervasive price pressures. S&P Global’s survey suggested input cost inflation was the slowest in more than three years in February. “Companies sought to pass higher costs on to customers, causing selling prices to rise at a sharper pace, albeit still one of the lowest since early-2020,” the release noted.

Frankly, the data felt lost in the proverbial shuffle — drowned out by record highs for Bitcoin and (gasp) lower equity prices.

The assumption among some market participants headed into Tuesday was that ISM services would almost invariably extend the bear flattener. After all, even if the prices paid component eased a bit, 62 (consensus) would still count as uncomfortably high and should thereby be expected to harden the Fed’s resolve around holding terminal. Instead, ISM ended up a bull flattener as the combination of a sharper-than-expected drop on the prices gauge and the contraction-territory employment component underpinned an already-bid long-end.

I’m not convinced that’s the “right” read, though. Again: Activity and new orders were apparently robust last month. As S&P Global’s Chris Williamson put it Tuesday, America’s goods- and services- producing sectors “are collectively reporting the sharpest growth since last June, hinting at a further quarter of solid GDP growth.” The underlying demand impulse may put a floor under prices, which could in turn “worry policymakers about cutting interest rates too early.”