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Economy in Brief
U.S. Consumer Credit Growth Surges in June
Consumer credit outstanding jumped $40.1 billion (7.7% y/y) in June...
Japan's LEI Waffles and Slows
Japan's leading economic index in June slipped to 100.6...
U.S. Foreign Trade Deficit Narrows in June
The U.S. trade deficit in goods and services (BOP basis) fell to $79.61 billion in June...
U.S. Unemployment Claims Remain on an Uptrend
Initial claims for unemployment insurance filed in the week ended July 30 rose 6,000 to 260,000...
RICS Survey Shows Weakening U.K. Housing Market
With the Bank of England hiking its key rate by 50 basis points and planning to squeeze its balance sheet...
Viewpoints
Commentaries are the opinions of the author and do not reflect the views of Haver Analytics.
Excess Demand for Goods Caused Supply Constraints
Q2 GDP Does Not Confirm Economic Recession, But It Does Confirm A Corporate Profit Recession
State Coincident Indexes in June 2022
State Labor Markets in June 2022
No Recession Call Can Be Made Before BEA Explains The Record Gap Between Income & Output
by Tom Moeller August 3, 2007
The non-manufacturing sector Business Activity Index for July fell back to 55.8 from an unrevised 60.7 during the prior month according to the Institute for Supply Management.
Since the series' inception in 1997 there has been a 46% correlation between the level of the Business Activity Index and the Q/Q change in real GDP for services plus construction.
The employment sub index also fell to 51.7 from the high of 55.0 in June. Since the series' inception in 1997 there has been a 56% 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.
The new orders index also fell m/m to 52.8 from 56.9 in June, down for the second month in a row but the latest still indicates growth in new orders.
Pricing power also slipped for the second month, but by a hard 4.2 points to 61.3, the lowest level since February. 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 back to July 1997.
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 | July | June | July '06 | 2006 | 2005 | 2004 |
---|---|---|---|---|---|---|
Business Activity Index | 55.8 | 60.7 | 55.7 | 58.0 | 60.2 | 62.5 |
Prices Index | 61.3 | 65.5 | 72.1 | 65.2 | 68.0 | 68.8 |