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Economy in Brief

U.S. Composite Index of Services Activity Takes a Breather in August
by Kathleen Stephansen, CBE  September 3, 2021

• Economic activity in the services sector eased in August.

• The report still points to the 15th straight month of growth for the sector.

• Price increases remain elevated.

The Composite Index of Services Activity eased to 61.7 in August from the all-time high of 64.1 in July. The August read nonetheless indicates the 15th straight month of growth for the services sector. The Action Economics Forecast Survey had expected a rise to 62 in August from a forecasted 60.6 read in July. Haver Analytics constructs a composite index combining the services index and the manufacturing reading. The composite index stood at 61.5 in August, down from a near-record high of 63.6 in July.

The business activity declined to 60.1 in August from 67.0 in July, when it reached the highest point since March, pointing to a slower pace of growth during August. The new orders index eased slightly to 63.2 from 63.7 in July, with 72.2% (NSA) of industries reporting growing orders and 16.7% reporting contracting orders. The employment reading was little changed in August, at 53.7 against 53.8 in July.

The supplier delivery index declined in August to 69.6 from 72.0 in July, with 94.4% of industries surveyed still reporting slower supplier deliveries, unchanged from July. Inventories dropped to 46.9 from 49.2 in July, and the order backlog index eased to 61.3 from 63.5 in July.

The prices index declined to 75.4 in August from a rise to 82.3 in July, with respondents still saying that "Price increases are ever-present and repetitive."

The export orders series declined to 60.6 in August from 65.8 in July, indicated a slower pace of growth, while imports fell to 48.7 from 51.5 in July, indicating a contraction in activity during August. These series are not seasonally adjusted and are not included in the nonmanufacturing composite total.

The ISM figures are available in Haver's USECON database, with additional detail in the SURVEYS database. The series dates back to July 1997. The expectations figure from Action Economics is in the AS1REPNA database.

ISM Services Survey (SA) Aug Jul Jun Aug '20 2020 2019 2018
Services PMI 61.7 64.1 60.1 57.2 54.3 55.5 59.0
   Business Activity 60.1 67.0 60.4 62.6 55.8 58.0 61.6
   New Orders 63.2 63.7 62.1 58.5 55.6 57.6 61.5
   Employment 53.7 53.8 49.3 47.4 46.0 55.0 56.9
   Supplier Deliveries (NSA) 69.6 72.0 68.5 60.5 59.7 51.5 55.8
Prices Index 75.4 82.3 79.5 63.4 58.6 57.5 62.0
ISM Mfg. & Services (Haver Composite) 61.5 63.6 60.2 57.0 54.1 55.0 58.9
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