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Economy in Brief
U.S. Empire State Manufacturing Index Plummets in August; Lowest Since May '20
The Empire State Manufacturing Index of General Business Conditions plunged to -31.3 in August...
U.S. Import and Export Prices Fall in July; Deepest Since April 2020
Import prices fell 1.4% m/m (8.8% y/y) in July...
U.S. Housing Affordability Declines Further in June
The NAR Fixed Rate Mortgage Housing Affordability Index fell 3.6% in June...
EMU Output Makes Solid Gain in June
The European Monetary Union posted a 0.7% increase for industrial output in June...
U.S. Producer Prices Fall During July; Core Increase Weakens
The Producer Price Index for Final Demand fell 0.5% during July...
Viewpoints
Commentaries are the opinions of the author and do not reflect the views of Haver Analytics.
by Tom Moeller June 3, 2005
The May Business Activity Index for the non-manufacturing sector fell to 58.5 from 61.7 in April, reported the Institute for Supply Management. The average level so far this year of 60.5 is below the 2004 average of 62.4. Consensus expectations had been for a reading of 60.0 for May.
Since the series' inception in 1997 there has been a 50% correlation between the Business Activity Index and the q/q change in real GDP for services plus construction.
Both the new orders index and the employment indexes rose slightly m/m but remained well off the earlier highs. 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 dropped again m/m to the lowest level since August 2003.
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.
ISM Nonmanufacturing Survey | May | April | May '04 | 2004 | 2003 | 2002 |
---|---|---|---|---|---|---|
Business Activity Index | 58.5 | 61.7 | 63.3 | 62.4 | 58.2 | 55.1 |
Prices Index | 57.9 | 61.9 | 72.0 | 69.0 | 56.8 | 54.0 |