Global| Oct 05 2016U.S. ISM Nonmanufacturing Index Strengthens
by:Tom Moeller
|in:Economy in Brief
Summary
The Composite Index of Nonmanufacturing Sector Business Activity from the Institute for Supply Management (ISM) improved to 57.1 in September from an unrevised 51.4 in August. It was the highest level since October 2015. Expectations [...]
The Composite Index of Nonmanufacturing Sector Business Activity from the Institute for Supply Management (ISM) improved to 57.1 in September from an unrevised 51.4 in August. It was the highest level since October 2015. Expectations in the Action Economics Forecast Survey had been for 52.9. 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 that was released Monday. This Composite rose to 56.4, also its highest level since October. During the last ten years, there has been a 73% correlation between this index and the q/q change in real GDP.
Several of the nonmanufacturing components showed sharp improvement. The business activity index rose to 60.3, the highest level since October of last year. New orders similarly jumped to 60.0 from 51.4. Finally, employment neared the October high with a surge to 57.2. 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. In contrast, the supplier deliveries index eased to 51.0, about where it's been for three months.
The prices paid series increased 54.0, its highest level in three months. Fifteen percent (NSA) of respondents paid higher prices while 12 percent paid less.
The export order series rebounded to 56.5 and made up its August decline. The imports series was little changed at 51.0. The order backlog measure increased sharply to 52.0. 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) | Sep | Aug | Jul | Sep'15 | 2015 | 2014 | 2013 |
|---|---|---|---|---|---|---|---|
| Composite Diffusion Index | 57.1 | 51.4 | 55.5 | 56.7 | 57.1 | 56.2 | 54.6 |
| Business Activity | 60.3 | 51.8 | 59.3 | 60.1 | 60.8 | 59.7 | 56.6 |
| New Orders | 60.0 | 51.4 | 60.3 | 56.4 | 59.2 | 58.6 | 55.8 |
| Employment | 57.2 | 50.7 | 51.4 | 57.9 | 56.1 | 54.9 | 54.3 |
| Supplier Deliveries (NSA) | 51.0 | 51.5 | 51.0 | 52.5 | 52.5 | 51.8 | 51.7 |
| Prices Index | 54.0 | 51.8 | 51.9 | 49.1 | 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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