Recent Updates
- Global Supply Chain Pressure Index (Mar, Apr)
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- US: New Residential Construction (Apr)
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Economy in Brief
U.S. Mortgage Applications Continued to Slide Amid Higher Rates
The biggest declines have been in refinancing activity, while applications for purchase are just starting to crack...
UK Inflation Jumps
Inflation is at the highest rate since the series began in January of 1989...
U.S. Industrial Production Much Stronger than Expected in April
The increase in manufacturing output in April was once again led by motor vehicle and parts production...
U.S. Retail Sales Posted Solid Rise in April
Notwithstanding falling real incomes and declining confidence measures, consumer spending posted a solid increase...
U.S. Home Builder Index Took a Steep Drop in May
This is the fifth straight month that builder sentiment has declined...
Viewpoints
Commentaries are the opinions of the author and do not reflect the views of Haver Analytics.
The Many Links of Inflation Cycle: Hard Landing Is Needed to Crack Them
Peak Inflation & Fed Policy: A Relationship Which Should Worry The Fed And Scare Investors
Why Have the Yields on TIPS Been Negative in the Past Two Years?
"Core" GDP Suggests Economy Gained Momentum in Q1:2022
by Tom Moeller May 5, 2020
• ISM Nonmanufacturing Index weakened substantially to 2009 low.
• Business activity and new orders lead the index lower.
• Prices strengthen.
The Composite Index of Nonmanufacturing Sector Activity from the Institute for Supply Management (ISM) weakened to 41.8 during April from 52.5 in March. It was the lowest level since March 2009. A reading of 37.7 had been expected in the Action Economics Forecast Survey.
Haver Analytics constructs a composite index combining the nonmanufacturing index and the manufacturing reading which was released on Friday. The composite index fell as well to 41.8, also the lowest level since March 2009. During the last 15 years, there has been a 64% correlation between the index level and the q/q change in real GDP. The composite index is based on GDP shares.
The reading of business activity plummeted to a record low for the series which began in 1997. New orders also fell to a record low as did the employment figure. Only six percent of respondents reported increased hiring while 47% reported less. The supplier delivery series offset these declines with a record increase, as the percentage of respondents reporting slower delivery speeds soared.
The prices index rose modestly to 55.1. A greatly increased 31% of respondents reported higher prices while a little-changed 16% reported them lower. The percentage reporting no change in prices droppedsharply.
The export orders series collapsed to nearly a record low. Order backlogs also fell but imports recaptured most of a severe decline during March. These series are not seasonally adjusted and are not included in the nonmanufacturing composite.
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) | Apr | Mar | Feb | Apr'19 | 2019 | 2018 | 2017 |
---|---|---|---|---|---|---|---|
Composite Diffusion Index | 41.8 | 52.5 | 57.3 | 55.7 | 55.5 | 59.0 | 56.9 |
Business Activity | 26.0 | 48.0 | 57.8 | 59.6 | 58.0 | 61.7 | 60.2 |
New Orders | 32.9 | 52.9 | 63.1 | 58.3 | 57.5 | 61.4 | 59.3 |
Employment | 30.0 | 47.0 | 55.6 | 54.5 | 55.0 | 56.9 | 55.1 |
Supplier Deliveries (NSA) | 78.3 | 62.1 | 52.4 | 50.5 | 51.5 | 55.8 | 53.2 |
Prices Index | 55.1 | 50.0 | 50.8 | 55.6 | 57.6 | 62.1 | 57.7 |
ISM Manufacturing and Nonmanufacturing Composite | 41.8 | 52.1 | 56.5 | 55.4 | 55.0 | 59.0 | 57.0 |