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Economy in Brief
U.S. Mortgage Applications Continue to Weaken
The MBA Loan Applications Index fell 1.2% (-54.5% y/y) in the week ended May 20...
German Climate Reading Continues to Skid Toward the Abyss
Germany's GfK consumer climate reading improved ever so slightly in June...
U.S. New Home Sales Plunge in April as Prices Jump
The new home sales market is unraveling...
U.S. Energy Prices Rise Further
Retail gasoline prices increased to $4.59 per gallon in the week ended May 23...
S&P Flash PMIs Are Mixed in May As Manufacturing Erodes Slowly
Among the early reporting countries in Europe and Japan, the S&P PMI readings for May tilt toward weakness...
Viewpoints
Commentaries are the opinions of the author and do not reflect the views of Haver Analytics.
State Coincident Indexes in April 2022
State Labor Markets in April 2022
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The Many Links of Inflation Cycle: Hard Landing Is Needed to Crack Them
Peak Inflation and Fed Policy: A Relationship which Should Worry the Fed and Scare Investors
by Tom Moeller May 3, 2012
The Composite Index for the service and construction sectors from the Institute for Supply Management (ISM) fell to 53.5 in April versus an unrevised 56.0 during March. Declines during the last two months pulled the figure to its lowest level this year. The latest compared to Consensus expectations for a lesser decline to 55.5. Since the series' inception in 1997 there has been a 58% correlation between the level of the nonmanufacturing composite index and the q/q change in real GDP for the service and the construction sectors.
Haver Analytics calculates a composite index using this number and the ISM manufacturing sector index released on Tuesday. The figure fell to 53.7, its lowest this year. During the last ten years there has been a 77% correlation between the figure and the quarterly change in real GDP.
The business activity component of the nonmanufacturing index collapsed to 54.6, its lowest level since October. The new orders series continued down also to its lowest since October. The supplier delivery series rose to 51.5, indicating slower delivery speeds and less economic slack. The employment series fell to 54.2, is lowest level this year. Since the series' inception in 1997 there has been an 87% correlation between the level of the ISM nonmanufacturing employment index and the m/m change in payroll employment in the service-producing plus the construction industries.
The prices index collapsed to 53.6, its lowest level since July 2009. A lessened 29% of respondents reported higher prices and 7% reported them lower. Since inception ten years ago, there has been a 65% correlation between the price index and the Q/Q change in the GDP services chain price index.
Beginning with the January 2008 Nonmanufacturing Report On Business ®,the composite index is calculated as an indication of overall economic conditions for the non-manufacturing sector. It is a composite index based on the diffusion indices of four of the indicators (business activity, new orders, employment and supplier deliveries) with equal weights.
The ISM data are available in Haver's USECON database. The expectations figure from ACTION ECONOMICS is in the AS1REPNA database.
ISM Nonmanufacturing Survey | Apr | Mar | Feb | Apr'11 | 2011 | 2010 | 2009 |
---|---|---|---|---|---|---|---|
Composite Index | 53.5 | 56.0 | 57.3 | 54.4 | 54.5 | 54.1 | 46.3 |
Business Activity | 54.6 | 58.9 | 62.6 | 56.0 | 57.3 | 57.5 | 48.1 |
New Orders | 53.5 | 58.8 | 61.2 | 55.3 | 56.4 | 56.9 | 48.0 |
Employment | 54.2 | 56.7 | 55.7 | 53.3 | 52.4 | 49.7 | 40.0 |
Supplier Deliveries (NSA) | 51.5 | 49.5 | 49.5 | 53.0 | 51.9 | 52.2 | 49.0 |
Prices Index | 53.6 | 63.9 | 68.4 | 68.3 | 65.1 | 61.6 | 49.5 |