Global| Nov 04 2015U.S. ISM Nonmanufacturing Index Improvement Led by New Orders
by:Tom Moeller
|in:Economy in Brief
Summary
The Institute for Supply Management (ISM) Composite Index of Nonmanufacturing Sector Business recovered to 59.1 during October after an unrevised September decline to 56.9. Consensus expectations had been for 56.5 in the Action [...]
The Institute for Supply Management (ISM) Composite Index of Nonmanufacturing Sector Business recovered to 59.1 during October after an unrevised September decline to 56.9. Consensus expectations had been for 56.5 in the Action Economics Forecast Survey.
Haver Analytics constructs a Composite Index using the nonmanufacturing ISM index and the ISM factory sector measure, released Monday. It rose to 58.0 and also recovered its decline in the prior month. During the last ten years, there has been a 73% correlation between the index and the q/q change in real GDP.
The increase in the composite index was led by a sharp recovery to 62.0 in new orders. The business activity reading also gained to 63.0 and made up most of its September decline. The employment index rose moderately to 59.2 and nearly matched its expansion high. 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 supplier delivery series eased and indicated the quickest delivery speeds since June. The latest reading of 52.0 was off sharply from a high of 55.0 in February.
The prices paid series improved slightly to 49.1 but remained below the break-even level of 50 for a second month. Ten percent (NSA) of respondents paid higher prices while 16 percent paid less.
The export order series (NSA) notched higher m/m but remained near an eight-month low. Imports jumped m/m, but remained down versus a 2004 high. The inventory series fell sharply m/m to a four-month low.
The ISM data are available in Haver's USECON database. The expectations figure from Action Economics is in the AS1REPNA database.
| ISM Nonmanufacturing Survey (SA) | Oct | Sep | Aug | Oct'14 | 2014 | 2013 | 2012 |
|---|---|---|---|---|---|---|---|
| Composite Diffusion Index | 59.1 | 56.9 | 59.0 | 56.9 | 56.3 | 54.6 | 54.6 |
| Business Activity | 63.0 | 60.2 | 63.9 | 60.5 | 59.7 | 56.7 | 57.6 |
| New Orders | 62.0 | 56.7 | 63.4 | 59.3 | 58.6 | 55.8 | 56.5 |
| Employment | 59.2 | 58.3 | 56.0 | 58.3 | 54.9 | 54.3 | 53.5 |
| Supplier Deliveries (NSA) | 52.0 | 52.5 | 52.5 | 49.5 | 51.8 | 51.7 | 50.6 |
| Prices Index | 49.1 | 48.4 | 50.8 | 52.8 | 56.8 | 55.6 | 59.3 |
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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