Posts Tagged ‘Non-Manufacturing ISM’

Non-Manufacturing ISM Remains Subdued in January

February 3rd, 2010 Michael McDonough Comments off

Janurary’s non-manufacturing ISM release rose modestly to 50.5 versus 49.8 in December. This was just below the Bloomberg consensus forecast of 51.0. The employment index rose to 44.6 from 43.6, while the prices paid index climbed to 61.2 from 59.6.  The new orders index took a bit of a bounce in January moving to 54.7 versus 52.0 a month prior, which could help to bolster the index next month.  Growth in the service sector, unlike manufacturing, has been relatively subdued over the past six months with the index bobbing around the 50 break-even point since August.  This report is further evidence of uneven economic growth and the fragility of the current economic recovery.


Non-Manufacturing ISM Goes Back Above 50, But Barely

January 6th, 2010 Michael McDonough Comments off

The December non-manufacturing ISM came in at 50.1 versus 48.7, a month prior.  The Bloomberg consensus forecast was 50.5 with estimates ranging from 48.0 to 52.1.  The all important employment index finished December at 44.0 versus 41.6 in November.  The prices paid index remained well above 50 coming in at 58.7 from 57.8.  The standalone business index moved into expansionary territory with a reading of 53.7 compared to 49.6, reported last month.  The new orders index, which tends to be a forward looking component fell to 52.1 from 54.5 a month prior–reaching a four month low.  This could add to some weakness in the months ahead.

The non-manufacturing ISM’s employment index’s rise to 44.0 from 41.6 in November is unlikely to have a significant impact on forecasts for Fridays non-farm payrolls.  However, combining this morning’s ADP employment report, indicating a payroll decline of -84K, and the fact that the non-manufacturing ISM employment index is still well below 50 the probability of positive payrolls is marginally reduced.


ADP Was a Non-Event, But Keep Your Eyes on this Morning’s Non-Manu ISM Employment Index

November 4th, 2009 Michael McDonough Comments off

It is unlikely that this morning’s ADP data (-203K), will lead to any substantial payroll revisions, despite what was a stellar ISM employment index.  I wanted to note that over the decades, as the US has shifted from a manufacturing to service oriented economy, the significance of the relationship between the manufacturing ISM’s employment index and payrolls has somewhat diminished.  However, if we see a similar jump in this morning’s non-manufacturing ISM employment index (10:00AM)  revisions could once again be on the table. Based on the data currently available my own projection for this month’s change in payrolls in -185K, however, I should note that payrolls have surprised to the upside of my forecast for 2 of the last 3 months.


July’s Non-Manufacturing ISM comes in Below Expectations

August 5th, 2009 Michael McDonough Comments off

July’s non-manufacturing ISM came in at 46.4, compared to last month’s reading of 47.0 in June, and a market consensus of 48.2.  July’s employment index moved to 41.5 from 43.4.  The prices paid index moved to 41.3 from 53.7.  Weakness in the employment index coupled with a weaker than anticipated ADP report could place negative pressure on Friday’s critical payroll release.  The market had an immediate adverse reaction to the news.  Seven of the 18 industries tracked by the index report gains in July, led by real estate, entertainment, and agriculture.

Non-Manufacturing ISM Breakdown:

Jul-09 Jun-09 May-09 Apr-09 Mar-09 Feb-09 Jan-09
NMI/PMI 46.4 47.0 44.0 43.7 40.8 41.6 42.9
Bus Activity 46.1 49.8 42.4 45.2 44.1 40.2 44.2
New Orders 48.1 48.6 44.4 47.0 38.8 40.7 41.6
Backlog Orders 42.0 46.0 40.0 44.0 41.0 36.5 37.5
New Export Orders 47.5 54.5 47.0 48.5 39.0 40.0 39.0
Inventory Sent 62.5 67.0 62.5 62.5 60.0 66.5 62.5
Imports 45.0 47.0 46.0 48.5 37.0 39.0 40.5
Prices Index 41.3 53.7 46.9 40.0 39.1 48.1 42.5
Employment 41.5 43.4 39.0 37.0 32.3 37.3 34.4
Supplier Deliveries 50.0 46.0 50.0 45.5 48.0 48.0 51.5

Additionally, July factory orders were also released at 10:00AM and they rose 0.4%, compared to a Bloomberg consensus of -0.8%.  Non-durable goods orders rose 2.7% in June.

ISM respondents had this to say regarding their sectors:

  • “Economic activity continues to decline.” (Transportation & Warehousing)
  • “Continued soft sales, offset by improving profit margins.” (Accommodation & Food Services)
  • “Stimulus funds have increased business activity.” (Public Administration)
  • “Business downturn seems to be stabilizing somewhat.” (Information)
  • “There is still downward pressure on our products; however, our sales volume is stabilizing.” (Mining)
  • “The past month’s volume target and operating volumes were met. Rising concerns over the future form of healthcare reform and impact on provider organizations.” (Health Care & Social Assistance)
  • “Although attendance is up, business levels remain steady. More people, fewer dollars spent — an indication that discretionary spending is limited.” (Arts, Entertainment & Recreation)

Non-Manufacturing ISM vs Manufacturing ISM

NonmanISMSource: St Louis Fed