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Economy in Brief

U.S. ISM Services Index Slips in September
by Tom Moeller  October 5, 2022

• Employment moves higher.

• Business activity, new orders & supplier deliveries decline.

• Price gains ease further.

The Services PMI from the Institute for Supply Management eased to 56.7 during September and reversed the August improvement to 56.9. The figure remained below the peak of 68.4 in November 2021. The Action Economics Forecast Survey expected a reading of 56.2 for September.

Haver Analytics constructs a composite index combining the services index and the manufacturing reading released on Monday. This index fell to 56.1 from 56.5 in August and has been little-changed during the last six months. The figures are below a November 2021 high of 67.6. These series date back to July 1997.

In the latest services survey, the employment index surged to 53.0 in September from 50.2 in August. It was the highest level in six months and up from 47.4 in June. Twenty-four percent of respondents reported more jobs while 17.9% indicated a decline.

Working lower, the business activity index fell to 59.1, a three-month low. Thirty-three percent (NSA) of respondents reported higher activity while 10.8% reported an activity decline. The new orders index weakened to 60.6 from 61.8. Thirty-seven percent (NSA) of respondents reported more orders while 10.8% reported a decline. The supplier deliveries index fell to 53.9 (NSA) in September, down from a high of in 75.7 November of last year. A lessened 10.3% of respondents reported faster delivery speeds while a fewer 18.1% reported slower speeds.

Pricing power continued to deteriorate. The prices index declined to 68.7 in September. It was the lowest level since January 2021, down from a record 84.6 in April. A lessened 42.6% (NSA) of respondents reported price increases and a fewer 6.2% reported price declines.

The new export orders index rose to 65.1 in September from 61.9 in August, indicating fastest growth in new export orders in just over a year. The imports index rose to 51.3, suggesting higher imports after declines for three straight months. The order backlog index fell to 52.5, a four-month low. The inventory change index declined to 44.1, still indicating inventory decumulation. These series are not seasonally adjusted and not included in the ISM Services PMI 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.

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.

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