October 3, 2012

ISM and ADP Reports Show Increases and Beat Expectations

Filed under: Economy — Tom @ 3:36 pm

First, from the Institute for Supply Management:

Economic activity in the non-manufacturing sector grew in September for the 33rd consecutive month …

“The NMI™ registered 55.1 percent in September, 1.4 percentage points higher than the 53.7 percent registered in August. This indicates continued growth this month at a faster rate in the non-manufacturing sector. The Non-Manufacturing Business Activity Index registered 59.9 percent, which is 4.3 percentage points higher than the 55.6 percent reported in August, reflecting growth for the 38th consecutive month. The New Orders Index increased by 4 percentage points to 57.7 percent. The Employment Index decreased by 2.7 percentage points to 51.1 percent, indicating growth in employment for the second consecutive month but at a slower rate. The Prices Index increased 3.8 percentage points to 68.1 percent, indicating higher month-over-month prices when compared to August. According to the NMI™, 12 non-manufacturing industries reported growth in September. Respondents’ comments continue to be mixed; however, the majority indicate a slightly more positive perspective on current business conditions.”

Business Insider’s email predicted a slight decline to 53.5.

The same anomaly found in the Manufacturing Index on Monday is in the NMI report, namely that Order Backlog went into contraction while New Orders went into stronger expansion.

Despite the answers to questions asked a couple of years ago, I’m reserving some skepticism on the strength of this reading.

Now, to ADP’s employment report:

Employment in the U.S. nonfarm private business sector increased by 162,000 from August to September, on a seasonally adjusted basis. The estimated gains in previous months were revised lower: the July increase was reduced by 17,000 to an increase of 156,000, while the August increase was reduced by 12,000 to an increase of 189,000. Employment in the private, service-providing sector expanded 144,000 in September, down from 175,000 in August. Employment in the private, goods-producing sector added 18,000 jobs in September. Manufacturing employment rose 4,000, while construction employment rose 10,000, the strongest since March when mild winter weather was boosting construction activity. The financial services sector added 7,000 jobs in September, marking the fourteenth consecutive monthly gain.

Business Insider’s email had a prediction of 140,000. I don’t recall seeing a previous-month revisions as large as the combined 29,000 (17K plus 12K) reported today for July and August.

The consensus before this report came out was for 100,000 job additions to be the Friday employment report reading. It will be interesting to see if the pre-release revisions go up or stay the same.


No Comments

No comments yet.

RSS feed for comments on this post.

Sorry, the comment form is closed at this time.