There was incrementally positive news on the US macro front Monday, when preliminary PMI readouts for March suggested services sector activity picked up during Q1’s final month.

The early look at S&P Global’s gauge found the services headline printing 54.3, ahead of estimates and up markedly from February’s final read.

Recall that the gauge fell sharply across the prior two months, fanning fears of a sudden stop for the biggest part of the world’s largest economy. The uptick thus counts as a meaningful reprieve at a time when survey data has been almost uniformly foreboding.

Chris Williamson, S&P Global’s Chief Business Economist, hailed “a welcome upturn in service sector activity,” which “helped propel stronger economic growth at the end of the first quarter.”

Current-quarter GDP tracking’s been the subject of some debate recently, with Trump administration apologists on Wall Street and across the cartoonish macro-market “blogosphere” going out of their way to explain why a contraction’s not a contraction. It’s not that I disagree, necessarily, with their logic, I just wonder if they would’ve afforded Kamala Harris the same excuses in the same circumstances.

Anyway, the flash read on the manufacturing side wasn’t as cheerful. At 49.8, it was in contraction territory. Now that you mention it, the rest of the release was subdued, at best, which is to say the good news began and ended with the headline beat for the services gauge.

Measures of businesses expectations were very poor, dropping to their second-worst levels since October 2022, when the S&P troughed for the cycle, and indicators of hiring were tepid. Input prices accelerated, hitting a two-year high on the factory side, indicative of tariff-related goods inflation, while companies’ capacity to pass along those costs was reportedly constrained by “competition.”

Williamson said “near-term risks seem tilted to the downside,” and suggested the upturn in services activity might’ve been mostly attributable to a “temporary bounce” as business “pick[ed] up after adverse weather conditions… in January and February.”

As for the medium-term outlook, it’s grim. Confidence, Williamson went on, is the worst in three years and there’s no mystery as to why: The gloom’s “largely caused by growing worries over negative impacts from recent policy initiatives from the new administration [including] the impact of Federal spending cuts and tariffs.”

Enough said.