The non-manufacturing ISM surveys nearly 400 firms from 60 sectors across the United States, including agriculture, mining, construction, transportation, communications, wholesale trade and retail trade. Beginning with the January 2008 report, a new composite index was made public and is now the headline number. It is considered an indicator of the overall economic conditions for the non-manufacturing sector and consists of four equally weighted indexes: business activity, new orders, employment, and supplier deliveries. Why Investors Care
| Released on 8/5/08 For Jul 2008 | ||||||||||||
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Highlights
U.S. purchasers are reporting declines in new orders, pointing to trouble for second-half growth and employment. The new orders index in ISM's non-manufacturing report fell nearly 1 point to 47.9, the lowest reading since January and the second lowest of the whole expansion. The new orders index in last week's ISM report on the manufacturing side fell nearly 5 points to 45.0 for the single lowest reading of the expansion.
The ISM non-manufacturing headline composite index, boosted by easing weakness in employment and an odd extension in delivery time, rose 1.3 points to 49.5. The business activity index, the report's former headline index and equivalent to a production or shipments index, eased 3 tenths to 49.6. Employment showed month-to-month contraction but at an easing rate, at 47.1 vs. a very weak 43.8 in June. Inventories rose in July to 54.5 vs. 53.0 though inventories on the manufacturing side, which are more closely watched because of their much greater size, showed a draw down in last week's ISM report. Price pressures remain very elevated at 80.8 but the ongoing easing in orders and continued contraction in employment do not point to pass through to final goods.
The dollar and Treasury yields firmed in reaction to the headline 49.5 reading which -- despite weakness in new orders -- was better than expected. Further movement in the markets isn't likely given the approach of this afternoon's FOMC statement.
The composite index from the ISM non-manufacturing survey has been pointing to stagflation in recent months with prices soaring and general activity flat. The non-manufacturing composite headline index fell to 48.2 in June from 51.7 the month before. Unfortunately weakness was centered in new orders which fell nearly 5 points in the latest month to 48.6. Inflation has been red hot at the input level with the prices paid index hitting a record high 84.5 in June, up 7.5 points from May.
Composite index Consensus Forecast for July 08: 49.0
Range: 47.5 to 51.0
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Beginning with the January 2008 report, a new composite index was made public and is now the headline number. It is considered an indicator of the overall economic conditions for the non-manufacturing sector and consists of four equally weighted indexes: business activity, new orders, employment, and supplier deliveries. |
| 2008 Release Schedule | ||||||||||||||||||||||||||
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