The Institute for Supply Management reported that the February Business Activity Index for the non-manufacturing sector rose to 59.8 from 59.2 the prior month. Consensus expectations had been for a decline to 57.0.

Since the series' inception in 1997 there has been a 50% correlation between the Business Activity Index and the q/q change in real GDP for services plus construction.

The employment sub index jumped 7.4 points to a record high. Since the series' inception in 1997 there has been a 60% correlation between the level of the ISM non-manufacturing employment index and the m/m change in payroll employment in the service producing plus the construction industries.

The new orders index rose to 61.6, the high end of a tight range held for the last year.

Pricing power eased a bit m/m to the lowest level in nearly a year.

ISM surveys more than 370 purchasing managers in more than 62 industries including construction, law firms, hospitals, government and retailers. The non-manufacturing survey dates only to July 1997, therefore its seasonal adjustment should be viewed tentatively.

Business Activity Index for the non-manufacturing sector reflects a question separate from the subgroups mentioned above. In contrast, the NAPM manufacturing sector composite index is a weighted average five components.

Financial Market Developments and Economic Activity during Current Account Adjustments in Industrial Economies from the Board of Governors of the Federal Reserve System is available here.