ISM Non-Manufacturing Index Shows Strong Conditions

The ISM non-manufacturing index, at 59.5 in February, easily beats Econoday's consensus and follows this morning's services PMI to hint at accelerating and perhaps unsustainably strong conditions for the bulk of the nation's economy.

New orders in ISM's sample are pouring in at, at 64.8 with new export orders also unusually strong at 59.5. These are moving into backlogs which keep building, to 56.0 which is unusually strong for this reading.

Deliveries continue to lengthen and input prices, at 61.0, are clearly elevated. ISM's sample hired in the month but, at 55.0, the employment index is down sharply from January's 61.6 which does not point to rising strength for Friday's employment report.

Outside of employment, however, this report does in fact point to rising strength, perhaps more than the sample can handle without inflationary pressures accelerating.