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Economy in Brief

U.S. ISM Services Index Jumps to Record Level in October
by Tom Moeller  November 3, 2021

• Component rise is broad-based.

• Business activity index leads October increase.

• Price reading hits record.

The ISM Index of Services Activity rose to 66.7 in October from 61.9 in September. The figure reached a record high for the series which dates back to July 1997. The Action Economics Forecast Survey had expected stability at 61.8. Haver Analytics constructs a composite index combining the services index and the manufacturing reading, released on Monday. This index rose to a record 66.1 in October from 61.8 in September.

In this services survey, the business activity reading rose to a new high of 69.8 in October from 62.3 in September. Other components also improved. The new orders index rose to 69.7 in October from September's 63.5. It also was the highest level for the series. The employment measure eased to 51.6 from 53.0 in September as a fairly steady 25.7% of respondents indicated higher employment but a greatly increased 21.4% reported it lower, the most since August 2020. The percentage indicating that employment held steady fell sharply to 52.9% of respondents. The supplier delivery index surged to 75.7 from 68.8 as a greatly increased 52.6% of respondents reported slower delivery speeds and a steady 1.3% reported them quicker.

The prices index increased to a near-record 82.9 during October after rising to 77.5 in September. A higher 66.2% of respondents reported price increases versus 59.8% in September while just 1.2% reported price declines.

The export orders series rose to 62.3 in October from 60.6 in September, both below the record 65.8 in July. The imports index rose sharply to 53.3 from 47.7 in September. The order backlog measure rose to a record 67.3 in October while the inventory change index fell sharply to 42.2 from 46.1. 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 expectations figure from Action Economics is in the AS1REPNA database.

ISM Services Survey (SA) Oct Sep Aug Oct '20 2020 2019 2018
Services PMI 66.7 61.9 61.7 56.2 54.3 55.5 59.0
   Business Activity 69.8 62.3 60.1 61.1 55.8 58.0 61.6
   New Orders 69.7 63.5 63.2 57.3 55.6 57.6 61.5
   Employment 51.6 53.0 53.7 50.1 46.0 55.0 56.9
   Supplier Deliveries (NSA) 75.7 68.8 69.6 56.1 59.7 51.5 55.8
Prices Index 82.9 77.5 75.4 62.7 58.6 57.5 62.0
ISM Mfg. & Services (Haver Composite) 66.1 61.8 61.5 56.5 54.1 55.0 58.9
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