U.S. Services Economic Growth Slowing, Worst Reading In Nearly Two Years

The U.S. services sector is seeing slower growth if the Institute for Supply Management’s non-manufacturing data for November turns out to be gospel.  The ISM non-manufacturing index fell to 52.0 for the month, which was well under the 53.5 consensus estimate from Dow Jones.

What is more important than the non-manufacturing data missing estimates is that it was lower than the 52.9 reading from the month of October.  This is still above the 50.0 breakeven line between growth and contraction.

The United States remains a service economy and the November data was actually the lowest overall reading since January 2010 when the level was 50.7 percent. The breakdown was as follows:

• Business Activity Index at 56.2%
• New Orders Index at 53%
• Employment Index at 48.9%

The areas deemed as “Contracting” were in employment, order backlog, and imports.  Perhaps the biggest concern is the “lagging growth” in the employment, something which continues to overshadow that near-mystery jobless rate of 8.6% from November that was due to “a smaller participation in the labor force.”  The full ISM report is available here.