January ISM Non-Manufacturing Falls but Hits 42nd Consecutive Month of Growth

February 5, 2013 by Jon C. Ogg

Auto repairThe January ISM Report on Business for the nonmanufacturing sector came in at 55.2%, down from 55.7% in December. The result was also just above the Dow Jones consensus of 55.0% and even closer to (but still above) the Bloomberg consensus of 55.1%. Here were the breakout reports today:

  • Business Activity Index at 56.4%, which is 4.4 percentage points lower than the seasonally adjusted 60.8% registered in December.
  • New Orders Index at 54.4%, a decrease of 3.9 percentage points from the seasonally adjusted 58.3% reported in December.
  • Employment Index at 57.5%, an increase of 2.2 percentage points when compared to the seasonally adjusted 55.3% registered in December.

The ISM said that this January Report on Business for the nonmanufacturing sector indicates continued growth at a slightly slower rate. The Non-Manufacturing Business Activity Index reflects growth for the 42nd consecutive month. Growth in employment has now been tracked for the sixth consecutive month.

The Prices Index rose by 1.9 percentage points to 58%, showing that prices increased at a faster rate in January over December. Eight nonmanufacturing industries reported growth in January. Respondents gave comments that were mixed about the economy and business conditions, but the majority of respondents are optimistic about the overall direction.

For the composite index, a reading above 50% indicates that the nonmanufacturing economy is considered to be expanding, while under 50% implies economic contraction.

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