The March reading of the ISM services index reached the highest level on record last month (with data going back to 1997), far outpacing economists' forecasts. At 63.7, it jumped more than eight points from the month before.

The big picture: Readings from business owners in the U.S. services sector now have joined the manufacturing sector in ebullience about the future, as stimulus checks hit bank accounts, vaccination rates rise and job growth returns.

Between the lines: "The details were just as strong as the headline," Lou Brien, economic strategist at DRW Trading, said in an email.

• Business activity rose 14 points to a record high, new orders rose 15 points and employment increased 4.5 points.
• And of course, business owners noted that the prices they paid for goods were rising, with the index for prices climbing to its highest since 2008 — a long-running theme of sentiment indexes this year.

What they're saying: "Respondents' comments indicate that the lifting of coronavirus (COVID-19) pandemic-related restrictions has released pent-up demand for many of their respective companies' services," Anthony Nieves, chair of ISM's services business survey committee, said in a release.

• "Production-capacity constraints, material shortages, weather and challenges in logistics and human resources continue to cause supply chain disruption."

State of play: Analysts at Jefferies noted that their U.S. economic activity index rose last week to the highest level since March 14, 2020.

• "Since bottoming on Jan 15, the index is up over 14 points," Jefferies money market economist Thomas Simons says in a note to clients.
• "Consumer activity accounts for half of that increase, consistent with the lift from fiscal stimulus and the reopening. Our employment and movement composites have also increased meaningfully, as confirmed by March payrolls. Our real-time tracking points to extremely strong retails sales for March."

But, but, but: The recovery may not be such a good sign for stock prices, Deutsche Bank chief global strategist Binky Chadha says.

• "Equities have historically traded closely with indicators of cyclical macro growth such as the ISMs (correlation 73%). Growth (ISM) typically peaks around a year (10-11 months) after recession ends, right at the point we would appear to be," he says in a note to clients.
• "The S&P 500 sold off around growth peaks by a median -8.4%, but even episodes which saw the ISM flatten out rather than fall, saw a median -5.9% selloff."