There are indications of slowing in this report but nothing severe. The signal on hiring is not being confirmed by government data though price indications are. This, unlike manufacturing reports, is a domestic-based report and continues to point to fundamental resiliency for the economy.
Recent History Of This Indicator:
The services PMI has been running in the mid-50s to indicate very solid growth in composite activity and the Econoday consensus is calling for a September reading of 55.8. But new orders have been slowing and service providers have been working down backlogs to keep busy. It hasn't stopped the sample from hiring, however, which the report has been describing all year as "robust". Price readings have been in contraction.
The services PMI has been running in the mid-50s to indicate very solid growth in composite activity and the Econoday consensus is calling for a September reading of 55.8. But new orders have been slowing and service providers have been working down backlogs to keep busy. It hasn't stopped the sample from hiring, however, which the report has been describing all year as "robust". Price readings have been in contraction.
...meanwhile...
Understandable
slowing in new orders and business activity, which have been
extraordinarily strong in the two prior reports, pulled down ISM's
non-manufacturing index to a still very solid 56.9 in September.
One component, however, that did not slow and which, had it been released last week, would have sent the wrong signal for the employment report is a 2.3 point jump in the employment index to 58.3. This, together with July's 59.6, are some of the strongest readings in the 18-year history of this series and a puzzle given softness in the government's payroll data.
Readings throughout this report are very strong including backlogs which have been building for four straight months and new export orders which have been rising for five months (note that foreign demand for U.S. services has proven very resilient at the same time that foreign demand for U.S. goods has been declining sharply.) The price indication in this report shows slight contraction in contrast to other surveys where price contraction is very sharp.
One component, however, that did not slow and which, had it been released last week, would have sent the wrong signal for the employment report is a 2.3 point jump in the employment index to 58.3. This, together with July's 59.6, are some of the strongest readings in the 18-year history of this series and a puzzle given softness in the government's payroll data.
Readings throughout this report are very strong including backlogs which have been building for four straight months and new export orders which have been rising for five months (note that foreign demand for U.S. services has proven very resilient at the same time that foreign demand for U.S. goods has been declining sharply.) The price indication in this report shows slight contraction in contrast to other surveys where price contraction is very sharp.
Recent History Of This Indicator:
Growth in the ISM non-manufacturing sample is expected to edge back 1 point to a composite 58.0, which nevertheless would be a very strong rate of growth. And in sharp contrast to the services PMI report, new orders have been rising sharply and backlog orders have been growing not contracting. Note that the ISM report includes the construction and mining sectors as well as the services sector.
Growth in the ISM non-manufacturing sample is expected to edge back 1 point to a composite 58.0, which nevertheless would be a very strong rate of growth. And in sharp contrast to the services PMI report, new orders have been rising sharply and backlog orders have been growing not contracting. Note that the ISM report includes the construction and mining sectors as well as the services sector.
No comments:
Post a Comment