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Economy in Brief

U.S. ISM Nonmanufacturing Index Weakens
by Tom Moeller  December 4, 2019

The Composite Index of Nonmanufacturing Sector Activity from the Institute for Supply Management (ISM) declined to 53.9 during November from 54.7 in October. The figure compared to the high of 60.8 in September 2018. A reading of 54.5 had been expected in the Action Economics Forecast Survey. Readings above 50 indicate a rise in activity.

Haver constructs a Composite Index using this nonmanufacturing reading and the manufacturing series released Monday. The figure fell to 53.2 from 54.0 in October. During the last 15 years, there has been a 70% correlation between this index and the q/q change in real GDP.

The decline in the nonmanufacturing index reflected a lower Business Activity measure. It fell to 51.6 from 57.0 and was the lowest reading since July 2009. The Supplier Delivery measure also fell to 51.5 from 52.5. This reading was down sharply from last year, indicating faster delivery speeds.

Working higher was the New Orders measure to 57.1, though it remained below earlier highs. Hiring activity also improved as the Employment index rose to 55.5 from 53.7. It was the highest level since July.

The Prices index rose to 58.5 from 56.6. It has been moving sideways since the end of last year. Eighteen percent of respondents reported paying higher prices while six percent paid less.

The ISM figures are available in Haver's USECON database, with additional detail in the SURVEYS database. The expectations figure from Action Economics is in the AS1REPNA database.

ISM Nonmanufacturing Survey (SA) Nov Oct Sep Nov'18 2018 2017 2016
Composite Diffusion Index 53.9 54.7 52.6 60.4 58.9 57.0 54.9
   Business Activity 51.6 57.0 55.2 64.3 61.5 60.2 58.0
   New Orders 57.1 55.6 53.7 62.7 61.3 59.3 57.6
   Employment 55.5 53.7 50.4 58.0 56.9 55.1 52.5
   Supplier Deliveries (NSA) 51.5 52.5 51.0 56.5 55.8 53.2 51.5
Prices Index 58.5 56.6 60.0 64.3 62.1 57.6 52.6
ISM Manufacturing + Nonmanufacturing Composite (SA) 53.2 54.0 52.1 60.2 58.9 57.0 54.5
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