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Economy in Brief

U.S. ISM Nonmanufacturing Index Improves
by Tom Moeller  July 6, 2015

The Institute for Supply Management (ISM) Composite Index of Nonmanufacturing Sector Business during June matched expectations and improved slightly to 56.0 from 55.7 in May. Nevertheless, the latest figure remained nearly the lowest since April of last year.

Haver Analytics constructs a Composite Index using the nonmanufacturing ISM index and the ISM factory sector measure, released Wednesday. It notched up to 55.7 but also remained near the lowest level since last April. During the last ten years, there has been a 72% correlation between the index and the q/q change in real GDP.

The supplier delivery index improved last month, showing slightly slower delivery speeds, following its May collapse. The business activity and new orders series also improved modestly. The employment index deteriorated again to its lowest point since January. During the last ten years, there has been an 88% correlation between the employment index and the m/m change in service plus construction payrolls.

The prices paid series back-pedaled moderately. Eighteen percent (NSA) of respondents paid higher prices. Ten percent paid lower prices.

The ISM data are available in Haver's USECON database. The expectations figure from Action Economics is in the AS1REPNA database.

ISM Nonmanufacturing Survey (SA) Jun May Apr Jun'14 2014 2013 2012
Composite Diffusion Index 56.0 55.7 57.8 56.3 56.3 54.6 54.6
   Business Activity 61.5 59.5 61.6 59.2 59.7 56.7 57.6
   New Orders 58.3 57.9 59.2 60.4 58.6 55.8 56.5
   Employment 52.7 55.3 56.7 54.5 54.9 54.3 53.5
   Supplier Deliveries (NSA) 51.5 50.0 53.5 51.0 51.8 51.7 50.6
Prices Index 53.0 55.9 50.1 60.1 56.8 55.6 59.3
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