Global| Sep 06 2017U.S. ISM Nonmanufacturing Index Improves
by:Tom Moeller
|in:Economy in Brief
Summary
The Composite Index of Nonmanufacturing Sector Activity from the Institute for Supply Management (ISM) rose to 55.3 during August from 53.9 in July. It remained near the lowest index level since August of last year. The Action [...]
The Composite Index of Nonmanufacturing Sector Activity from the Institute for Supply Management (ISM) rose to 55.3 during August from 53.9 in July. It remained near the lowest index level since August of last year. The Action Economics Forecast Survey expected 55.4. 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 Friday. This composite rose to 55.7 in August from 54.2, both down from the recent high of 57.6 in February. During the last ten years, there has been a 73% correlation between this index and the q/q change in real GDP.
Movement amongst the component series was mixed last month. The business activity index rose to 57.5, but remained near a twelve month low. The new orders reading rose as well to 57.1, but remained fairly depressed. The supplier delivery index eased to 50.5, equaling the quickened delivery speed of February.
The employment measure improved to 56.2, the highest level in three months. During the last ten years, there has been an 89% correlation between the ISM nonmanufacturing sector jobs index and the m/m change in private service plus construction sector payrolls. A greatly lessened 25% (NSA) of industries reported a rising jobs level while a modestly higher 15% indicated a decline.
The prices paid index increased to 57.9, but stayed just below the recent high of 59.0 in January and up from the 2015 low of 48.7. A higher 20% (NSA) of firms reported paying higher prices while an increased seven percent of firms reported them lower.
Amongst the other detail indexes, which are not seasonally adjusted, export orders rose m/m to 55.0, but remained down sharply versus the 65.5 April high. The import index declined m/m to 50.5 and was steady y/y. The order backlog index rose m/m and remained up versus twelve months earlier.
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 Nonmanufacturing Survey (SA) | Aug | Jul | Jun | Aug'16 | 2016 | 2015 | 2014 |
|---|---|---|---|---|---|---|---|
| Composite Diffusion Index | 55.3 | 53.9 | 57.4 | 51.7 | 54.9 | 57.1 | 56.2 |
| Business Activity | 57.5 | 55.9 | 60.8 | 52.4 | 58.0 | 60.8 | 59.6 |
| New Orders | 57.1 | 55.1 | 60.5 | 52.0 | 57.5 | 59.2 | 58.5 |
| Employment | 56.2 | 53.6 | 55.8 | 51.0 | 52.6 | 56.0 | 54.8 |
| Supplier Deliveries (NSA) | 50.5 | 51.0 | 52.5 | 51.5 | 51.5 | 52.5 | 51.8 |
| Prices Index | 57.9 | 55.7 | 52.1 | 51.8 | 52.7 | 50.6 | 56.7 |
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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