The
great bulk of the nation's economy enjoyed a solid February based on
ISM's non-manufacturing report where the headline index held solidly
over breakeven 50, at 53.4 vs January's 53.5.
New orders came in
at 55.5, down 1 point from January but still very solid. And backlog
orders continue to expand, at 52.0 for a second month in a row. Strength
in orders points to future strength in employment which, however, in
the report's only negative dipped 2.5 points to 49.7 for the first
sub-50 reading since February 2014.
Other details include a
nearly 4 point rise in output (defined as business activity in this
report) which is a solid indication for first-quarter growth. Prices for
inputs remain in contraction and inventories continue to expand
modestly. Export sales are also up though exports for this sample, in
contrast to manufacturing, are limited.
The dip in employment is
one of the few hints of trouble for tomorrow's employment report, but it
may prove a one-month event. Otherwise, readings in this report are
positive, a contrast to this morning's PMI services report and an
indication of extending strength for the domestic economy.
Recent History Of This Indicator:
Slowing steadily for six months, the ISM non-manufacturing index
correctly signaled the second-half dip in GDP and may be signaling
disappointing growth for the first quarter. But components for new
orders and backlogs have continued to show strength, though much less so
for employment where growth slowed sharply in January. The services PMI
from Markit Economics has also been slowing and forecasters se
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