Global| Aug 05 2015U.S. ISM Nonmanufacturing Index Jumps to 10-Year High
by:Tom Moeller
|in:Economy in Brief
Summary
The Institute for Supply Management (ISM) Composite Index of Nonmanufacturing Sector Business increased to 60.3 during July from an unrevised 56.0 in June. It was the highest level since August 2005 and surpassed expectations for 56.2 [...]
The Institute for Supply Management (ISM) Composite Index of Nonmanufacturing Sector Business increased to 60.3 during July from an unrevised 56.0 in June. It was the highest level since August 2005 and surpassed expectations for 56.2 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 increased to 59.4, also the highest level since August 2005. During the last ten years, there has been a 73% correlation between the index and the q/q change in real GDP.
Each of the component series improved significantly last month. The business activity reading jumped to 64.9, the highest level since January 2004. The new orders reading improved 5.5 points to 63.8. The employment index jumped to 59.6, a ten-year high. During the last ten years, there has been an 88% correlation between the employment index and the m/m change in service plus construction payrolls. The supplier delivery index rose to 53.0 and indicated the slowest delivery speeds in three months.
The prices paid series gained modestly to 53.7, remaining above the break-even level of 50 for the fifth straight month. Fourteen percent (NSA) of respondents paid higher prices while 10 percent paid less.
The export order series (NSA) rose to its highest point since March and improved moderately y/y. Imports rose modestly m/m but were down versus July 2004. The inventory series jumped sharply m/m and was well above the year-ago level.
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) | Jul | Jun | May | Jul'14 | 2014 | 2013 | 2012 |
|---|---|---|---|---|---|---|---|
| Composite Diffusion Index | 60.3 | 56.0 | 55.7 | 57.9 | 56.3 | 54.6 | 54.6 |
| Business Activity | 64.9 | 61.5 | 59.5 | 61.3 | 59.7 | 56.7 | 57.6 |
| New Orders | 63.8 | 58.3 | 57.9 | 62.6 | 58.6 | 55.8 | 56.5 |
| Employment | 59.6 | 52.7 | 55.3 | 56.1 | 54.9 | 54.3 | 53.5 |
| Supplier Deliveries (NSA) | 53.0 | 51.5 | 50.0 | 51.5 | 51.8 | 51.7 | 50.6 |
| Prices Index | 53.7 | 53.0 | 55.9 | 60.0 | 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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