August 5, 2014

ISM Non-Manufacturing Hits Highest Reading Since 2008 Inception: 58.7%, Up from 56.0% in June

Filed under: Economy — Tom @ 2:53 pm

From the Institute for Supply Management (most paragraph breaks added by me):

(Tempe, Arizona) — Economic activity in the non-manufacturing sector grew in July for the 54th consecutive month, say the nation’s purchasing and supply executives in the latest Non-Manufacturing ISM® Report On Business®.

The NMI® registered 58.7 percent in July, 2.7 percentage points higher than the June reading of 56 percent. This represents continued growth in the Non-Manufacturing sector. This month’s NMI® is the highest reading for the index since its inception in January 2008.

The Non-Manufacturing Business Activity Index increased to 62.4 percent, which is 4.9 percentage points higher than the June reading of 57.5 percent, reflecting growth for the 60th consecutive month at a faster rate. This is the highest reading for the index since February 2011 when the index registered 63.3 percent.

The New Orders Index registered 64.9 percent, 3.7 percentage points higher than the reading of 61.2 percent registered in June. This represents the highest reading for the New Orders Index since August 2005 when it registered 65.3 percent.

The Employment Index increased 1.6 percentage points to 56 percent from the June reading of 54.4 percent and indicates growth for the fifth consecutive month. The Prices Index decreased 0.3 percentage point from the June reading of 61.2 percent to 60.9 percent, indicating prices increased at a slightly slower rate in July when compared to June.

According to the NMI®, 16 non-manufacturing industries reported growth in July. …

The reference to points in time before the NMI refer to the old “services index”; ISM apparently sees such comparisons as valid.

Including the old services index, according to Zero Hedge, July’s reading is the highest in 9 years.

This is very good news. It would be nice if it were more obvious that this sentiment index correlates with hard-number reality on the ground. But it really isn’t.

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