ISM Shows Total Blowout in Non-Manufacturing in July
The Institute for Supply Management (ISM) has released a stellar Report on Business for the non-manufacturing segment of the U.S. economy.
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The Institute for Supply Management (ISM) has released a stellar Report on Business for the non-manufacturing segment of the U.S. economy. With the index hitting 60.3% in July, this report actually is considered a total blowout on the upside of estimates.
Bloomberg was calling for a mere 56.2% in July, versus 56.0% in June, and the range of economists was 55.0% to 57.5%. Again, that is a total blowout by being almost three points higher than the top estimate. It may be the 66th consecutive run of growth, as well as close to a 10-year high.
The devil is almost always in the details. Here was a breakdown of the three main components:
- Business Activity Index at 64.9%, for a gain of 3.4 points
- New Orders Index at 63.8%, for a 5.5 point gain
- Employment Index at 59.6%, for a 6.9 point gain
What may be of interest here is that the Prices Index increased 0.7 percentage point from the June reading and rose to 53.7% in this report. This translates to what is now higher prices paid for the fifth consecutive month. Sure, this is on non-manufacturing, but the United States is often considered a post-manufacturing economy, and the Federal Reserve is looking and hoping for higher prices anywhere it can find them.
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Of the industry gain, 15 non-manufacturing industries reported growth in July and two reported contraction. The two with contraction may be of little surprise: mining and “other services.” As a reminder, mining includes oil and energy, for the most part.
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Jon Ogg has been a financial news analyst since 1997. Mr. Ogg set up one of the first audio squawk box services for traders called TTN, which he sold in 2003. He has previously worked as a licensed broker to some of the top U.S. and E.U. financial institutions, managed capital, and has raised private capital at the seed and venture stage. He has lived in Copenhagen, Denmark, as well as New York and Chicago, and he now lives in Houston, Texas. Jon received a Bachelor of Business Administration in finance at University of Houston in 1992. www.247wallst.com.
