Recent Updates
- US: Consumer Sentiment (Feb-final), Chicago PMI (Feb),Personal Income, Adv Trade & Inventories (Jan)
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- Canada: Industrial Product Prices (Jan)
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Economy in Brief
Chicago Business Barometer Declines Sharply in February
The ISM-Chicago Purchasing Managers Business Barometer fell 4.3 points in February to 59.5...
Goods Trade Deficit Widened Slightly in January
The advance estimate of the U.S. trade deficit in goods widened slightly to $83.74 billion in January..
Japan's Industrial Sector Mounts a Comeback
Japan's IP surged in January gaining 4.3% compared to December...
Aircraft Orders Boost U.S. Durable Goods Orders in January
Manufacturers' orders for durable goods increased a much larger-than-expected 3.4% m/m (4.5% y/y) in January...
Kansas City Fed Manufacturing Index Increases Again in February
The Kansas City Fed reported that its manufacturing sector business activity index rose to 24 in February...
Viewpoints
Commentaries are the opinions of the author and do not reflect the views of Haver Analytics.
by Tom Moeller November 3, 2005
The October Non-manufacturing Sector Business Activity Index from the Institute for Supply Management recovered more than half of its September decline with a 6.7 point increase to 60.0. Consensus expectations had been for a lesser recovery to 57.0.
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.
The orders index gained back just a piece of its September decline with a 1.6 point rise. Conversely, the employment index fell for the third month in the last four to the lowest level since January. 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 reversed just some of the 14.3 point September surge to a record high with a 3.4 point decline. 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.
Today's testimony by Fed Chairman Alan Greenspan on the Economic Outlook before the Joint Economic committee can be found here.
ISM Nonmanufacturing Survey | Oct | Sept | Oct '04 | 2004 | 2003 | 2002 |
---|---|---|---|---|---|---|
Business Activity Index | 60.0 | 53.3 | 61.5 | 62.4 | 58.2 | 55.1 |
Prices Index | 78.0 | 81.4 | 74.0 | 69.0 | 56.8 | 54.0 |