Global| Aug 03 2016U.S. ISM Nonmanufacturing Index Dips
by:Tom Moeller
|in:Economy in Brief
Summary
The Composite Index of Nonmanufacturing Sector Business Activity from the Institute for Supply Management (ISM) eased to 55.5 during July after jumping to 56.5 in June. Expectations had been for 56.0 in the Action Economics Forecast [...]
The Composite Index of Nonmanufacturing Sector Business Activity from the Institute for Supply Management (ISM) eased to 55.5 during July after jumping to 56.5 in June. Expectations had been for 56.0 in the Action Economics Forecast Survey. The ISM data are diffusion indexes where readings above 50 indicate expansion.
Haver Analytics constructs a Composite Index using the nonmanufacturing ISM index and the ISM factory sector measure released Monday. It declined to 55.2, but remained above this year's average of 54.2. During the last ten years, there has been a 73% correlation between the index and the q/q change in real GDP.
Amongst the component series, a decline in the supplier delivery index to 51.0 led the way lower. In addition, the employment index eased to 51.4, but remained above break-even for the fifth month this year. During the last ten years, there has been a 96% correlation between the employment index and the m/m change in service plus construction payrolls. The new orders series increased to 60.3, its highest level in 9 months, and the business activity measure was little changed at 59.3.
The prices paid series declined to 51.9, the lowest level since March. Fifteen percent (NSA) of respondents paid higher prices while seven percent paid less.
The export order series increased to 55.5. The imports price series eased to 53.0. The order backlog figure rebounded to 51.0. Each of these last few readings is not seasonally adjusted
The figures are available in Haver's USECON database. The expectations figure from Action Economics is in the AS1REPNA database.
| ISM Nonmanufacturing Survey (SA) | Jul | Jun | May | Jul'15 | 2015 | 2014 | 2013 |
|---|---|---|---|---|---|---|---|
| Composite Diffusion Index | 55.5 | 56.5 | 52.9 | 59.6 | 57.1 | 56.2 | 54.6 |
| Business Activity | 59.3 | 59.5 | 55.1 | 63.4 | 60.8 | 59.7 | 56.6 |
| New Orders | 60.3 | 59.9 | 54.2 | 62.6 | 59.2 | 58.6 | 55.8 |
| Employment | 51.4 | 52.7 | 49.7 | 59.2 | 56.1 | 54.9 | 54.3 |
| Supplier Deliveries (NSA) | 51.0 | 54.0 | 52.5 | 53.0 | 52.5 | 51.8 | 51.7 |
| Prices Index | 51.9 | 55.5 | 55.6 | 52.3 | 50.7 | 56.8 | 55.7 |
Tom Moeller
AuthorMore in Author Profile »Prior to joining Haver Analytics in 2000, Mr. Moeller worked as the Economist at Chancellor Capital Management from 1985 to 1999. There, he developed comprehensive economic forecasts and interpreted economic data for equity and fixed income portfolio managers. Also at Chancellor, Mr. Moeller worked as an equity analyst and was responsible for researching and rating companies in the economically sensitive automobile and housing industries for investment in Chancellor’s equity portfolio. Prior to joining Chancellor, Mr. Moeller was an Economist at Citibank from 1979 to 1984. He also analyzed pricing behavior in the metals industry for the Council on Wage and Price Stability in Washington, D.C. In 1999, Mr. Moeller received the award for most accurate forecast from the Forecasters' Club of New York. From 1990 to 1992 he was President of the New York Association for Business Economists. Mr. Moeller earned an M.B.A. in Finance from Fordham University, where he graduated in 1987. He holds a Bachelor of Arts in Economics from George Washington University.
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