ISM Services Economy Shows Slowest Growth This Year

By Jon C. Ogg Updated Apr 27, 11:59PM EDT · Published May 3, 10:36AM EDT

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The Institute for Supply Management has released its data for April’s ISN non-Manufacturing sector and the reading is indicative of weaker and slowing growth. The overall NMI came in at 53.5% versus 56.0 in March and under the consensus expectation of 56.0 from Bloomberg. New orders and employment are both the weakest readings seen this year.

Business Activity Index at 54.6%, down by 4.3 percentage points lower than the 58.9 percent reported in March.
New Orders Index at 53.5%, a decrease of 5.3 percentage points.
Employment Index at 54.2%, a decrease of 2.5 percentage points.
The Prices Index decreased 10.3 percentage points to 53.6 percent, indicating prices increased at a significantly slower rate in April when compared to March.

This is the crux of the report and pretty much what you need to focus on: “Respondents’ comments affirm the slowing rate of growth. In addition, they remain concerned about rising fuel costs and the impact on shipping, transportation and petroleum-based product costs.” The good news is that the ISM data in the services (non-manufacturing) economy is still above the 50.0% line showing growth over recessionary trends. The bad news is that this is getting dangerously close to the red-line of contraction.

JON C. OGG

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About the Author Jon C. Ogg →

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.