·
The Institute for Supply Management reported that the Business Activity
Index for the non-manufacturing sector in November slipped to 58.5 from
an unrevised 60.0 the prior month. A reading above 50 indicates
expansion. The latest about matched Consensus expectations for a decline
to 59.0.
· Since the series' inception in 1997 there has been a 53% correlation between the Business Activity Index and the q/q change in real GDP for services plus construction.
· Despite the decline in the Business Activity gauge, the new orders component rose for the second month after a sharp September decline. In addition, the employment index rose 4 points to the highest level since August. Since the series' inception in 1997 there has been a 60% correlation between the level of the ISM non-manufacturing employment index and the m/m change in payroll employment in the service producing plus the construction industries.
· Pricing power fell for the second
month after a 14 point September surge. Since inception eight years ago,
there has been a 70% correlation between the price index and the y/y
change in the GDP Services chain price index.
· ISM surveys more than 370 purchasing managers in more than 62 industries including construction, law firms, hospitals, government and retailers. The non-manufacturing survey dates only to July 1997, therefore its seasonal adjustment should be viewed tentatively.
· Business Activity Index for the non-manufacturing sector reflects a question separate from the subgroups mentioned above. In contrast, the NAPM manufacturing sector composite index is a weighted average five components.