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Services PMI
Services are measured by the Purchasing Managers Index (PMI) in the US, Euro-zone, UK and Australia. A level above 50 indicates expansion in the services sector, while a reading below 50 indicators contraction. The Index measures employment, production, new orders, supplier deliveries, and inventories. It is also one of the timeliest indicators, coming out near the beginning of the month.

Main Indicator: ISM Non-Manufacturing Index

Most Recent Release

July
3rd, 2008
Actual Forecast Previous Revised Form
48.2 51.1 51.7 N/A

For June
Latest Release Provided by: Institute of Supply Management

Business Activity Index: 49.9, pr. 53.6
New Orders Index: 48.6, pr. 53.6
Employment Index: 43.8, pr. 48.7
Prices Index: 84.5, pr. 77.0

The US services sector contracted in June, with the ISM Non-Manufacturing Index coming in at 48.2. The number surprised forecasts. The data shows that firms are scaling back their spending as they see weaker growth ahead. Rising energy costs and weaker sales will cut into company spending, while consumer spending should fall as well, once the rebate checks go through the system. New orders turned negative, prices for raw materials in the production process kept climbing, and the employment index fell to 43.8 from 48.7, its lowest reading since records began in July 1997.

From the Release: "The NMI (Non-Manufacturing Index) decreased 3.5 percentage points in June to 48.2 percent, indicating contraction after two consecutive months of growth within the non-manufacturing sector. The Non-Manufacturing Business Activity Index decreased 3.7 percentage points to 49.9 percent. The New Orders Index decreased 5 percentage points to 48.6 percent, and the Employment Index decreased 4.9 percentage points to 43.8 percent. The Prices Index increased 7.5 percentage points to 84.5 percent in June, indicating a faster rate in price increases than in May. The Prices Index is at its highest level since this report began. According to the NMI, eight non-manufacturing industries reported growth in June. Members' comments in June indicate that rising fuel, energy and commodity costs are negatively impacting their respective businesses. Respondents' comments are mixed on business conditions and the overall economy."

Table of Past Data

10/311/512/51/42/53/54/35/56/47/3
Actual54.855.854.153.944.649.349.652.051.748.2
Forecast54.6 to 5554.055.053.553.044.048.549.151.051.1
Previous55.854.855.854.153.941.949.349.652.051.7
Revised FromN/AN/AN/AN/AN/AN/AN/AN/AN/AN/A

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Secondary Indicator: ISM Non-Manufacturing Prices

Most Recent Release

February
5th, 2008
Actual Forecast Previous Revised Form
70.7 69.8 72.2 N/A

Table of Past Data

5/36/57/58/39/610/311/512/51/42/5
Actual63.566.465.561.358.666.163.576.572.270.7
Forecast59.561.564.064.060.857.067.063.073.569.8
Previous63.363.566.465.561.358.666.163.576.572.2
Revised FromN/AN/AN/AN/AN/AN/AN/AN/AN/AN/A

Past Releases

ISM Non-Manufacturing Index
June
4th, 2008
Actual Forecast Previous Revised Form
51.7 51.0 52.0 N/A

For May
Latest Release Provided by: Institute of Supply Management

The services sector in may expanded, and the ISM index increased higher than expected. The sector has rebounded since the first quarter, where the index was below 50 for 3 months. The report comes along a line of better than expected data lately and bodes well for the economy.

ISM Non-Manufacturing Index
May
5th, 2008
Actual Forecast Previous Revised Form
52.0 49.1 49.6 N/A

For April
Provided by: Institute of Supply Management

US services grew in April, beating expectations of another month of contraction. The Dollar strengthened in a knee-jerk reaction to the news. The Business Activity/Production and New Orders subgauges decreased slightly, while Employment and Deliveries were up. Prices also continued increasing, climbing to 72.1 from March's 70.8. The report helps to bolster the case that the US economy is seeing some improved activity after the last two quarters saw the US face a sharp slowdown. The Federal Reserve policy makers have signaled that they will hold interest rates steady now at 2%. If economic data continues to surprise on the upside, then they will be able to carry out that intention.

ISM Non-Manufacturing Index
April
3rd, 2008
Actual Forecast Previous Revised Form
49.6 48.5 49.3 N/A
For March
Provided by: Institute of Supply Management

The Services sector surprised on the upside, albeit still showing contraction. The employment sub-index was flat at 46.9. The prices index increased to 70.8 and reflects a faster pace of price increases in March than in February. Along with yesterday's ADP employment estimates, the economy is showing the service sector more resilient than the manufacturing and other goods-producing sectors. This may be due to the fact that service sector jobs are more flexible when it comes to skill sets and training, while factory jobs for example require more specialization. Nevertheless, the ISM non-manufacturing employment index also shows contraction in the services sector.

Overall the report showed some good signs of recovery and gives hope that this slowdown will not get so deep.
ISM Non-Manufacturing Index
March
5th, 2008
Actual Forecast Previous Revised Form
49.3 44.0 41.9 N/A
For February
Official Release from Institute of Supply Management

The Services PMI showed back to back months of contraction and pressured the greenback, albeit an even lower forecast. The index rebounded slightly from January's reading, which was the lowest since 2001. As the largest component of the US economy, the services sector contraction coupled with manufacturing contraction adds new evidence that a recession is imminent.

ISM Non-Manufacturing Index
February
5th, 2008
Actual Forecast Previous Revised Form
44.6 53.0 53.9 N/A

For January - Released Early
Official Release from Institute of Supply Management

Business Activity Index: 41.9, pr. 54.4 (Dec)
New Orders Index: 43.5, pr. 53.5 (Dec), 51.1 (Nov)
Employment Index: 43.9, pr. 52.1 (Dec), pr. 50.8 (Nov)
Prices Index: 70.7, pr. 72.7 (Dec), pr. 76.5 (Nov)

From the Release:

"The new NMI (Non-Manufacturing Index) at 44.6 percent indicates contraction within the non-manufacturing sector for January 2008. Non-manufacturing business activity contracted for the first time since March 2003," Nieves said. He added, "The New Orders Index contracted to 43.5 percent, the lowest since October 2001. The Employment Index contracted to 43.9 percent, the lowest since February 2002. The Prices Index decreased to 70.7 percent in January, indicating a slight slowing in price increases for January. According to the new NMI, only three non-manufacturing industries reported growth in January. Members' comments in January indicate that weakness in the economy coupled with increased costs have negatively affected their business. Members have also indicated that they are experiencing inflationary pressures. The overall indication in January is that non-manufacturing has come to the end of a long-term period of growth and has contracted for the month of January."

ISM Non-Manufacturing Index
January
4th, 2008
Actual Forecast Previous Revised Form
53.9 53.5 54.1 N/A
For December.
Official Release from Institute of Supply Management.

New Orders Index: 53.5, pr. 51.1 (Nov)
Employment Index: 52.1, pr. 50.8 (Nov)
Prices Index: 72.7, pr. 76.5 (Nov)

Service sector activity performed better than expectations for December, though its growth did ease compared to November. Prices are still running high, though they dropped off almost 4 points from last month. The new orders and employment components performed better, but today's nonfarm employment change data from the Department of Labor showed that the US labor market is straining.
ISM Non-Manufacturing Prices
January
4th, 2008
Actual Forecast Previous Revised Form
72.2 73.5 76.5 N/A
For December. Summary from Institute of Supply Management

The growth in prices in the non-manufacturing sector increased at a slower pace than in November, but the 72.2 reading means that 72.2% of respondents faced higher prices compared to last month.
ISM Non-Manufacturing Index
December
5th, 2007
Actual Forecast Previous Revised Form
54.1 55.0 55.8 N/A
For November.
Institute of Supply Management

New Orders: 51.1, pr. 55.7
Employment: 50.8, pr. 51.8
Prices: 76.5, pr. 63.4

The Services sector in the US advanced at a slower pace in November as new orders decreased, while prices showed a surge in inflationary pressure. Ten industries showed improvement, led by communications and retail trade.
US stocks rallied today, as this news was added to better ADP jobs data, increase in factory orders, and improved 3rd quarter productivity.
ISM Non-Manufacturing Prices
December
5th, 2007
Actual Forecast Previous Revised Form
76.5 63.0 63.5 N/A
For November.
See "ISM Non-Manufacturing Prices" for more comments.

Prices increased for the 54th consecutive month, with this month showing a 13 percent point jump. Prices have been steadily gaining since August when this sub-gauge measured 58.6; in September it was 66.1; and in October it was 63.5.
ISM Non-Manufacturing Index
November
5th, 2007
Actual Forecast Previous Revised Form
55.8 54.0 54.8 N/A
For October.

New Orders: 55.7 (Oct), pr. 53.4 (Sept)
Employment: 51.8 (Oct), pr 52.7 (Sept)
Prices: 63.5 (Oct), pr. 66.1 (Sept)

The ISM Non-Manufacturing report came in better than expected, showing an increase to 55.8. New Orders also increased, though Employment dipped.
ISM Non-Manufacturing Prices
November
5th, 2007
Actual Forecast Previous Revised Form
63.5 67.0 66.1 N/A
ISM Non-Manufacturing Index
October
3rd, 2007
Actual Forecast Previous Revised Form
54.8 54.6 to 55 55.8 N/A
For September.

The Non-manufacturing Business activity index indicated slower growth than in August. New Orders Index decreased to 53.4 from 57. The Employment Index rebounded after dipping to 47.9 in August and came back to expansion in September with a reading of 52.7. Inventories dropped 7 pts from 57.0 to 50.0, to adjust to a "lower level of new orders", according to the Institute of Supply Management Report on Business.
ISM Non-Manufacturing Prices
October
3rd, 2007
Actual Forecast Previous Revised Form
66.1 57.0 58.6 N/A
For September.

Price pressures remain on the upside for the 52nd consecutive month.
ISM Non-Manufacturing Prices
September
6th, 2007
Actual Forecast Previous Revised Form
58.6 60.8 61.3 N/A
ISM Non-Manufacturing Prices
August
3rd, 2007
Actual Forecast Previous Revised Form
61.3 64.0 65.5 N/A
ISM Non-Manufacturing Prices
July
5th, 2007
Actual Forecast Previous Revised Form
65.5 64.0 66.4 N/A
This is the 49th month of consecutive price increases although at a slower rate than May.
ISM Non-Manufacturing Prices
June
5th, 2007
Actual Forecast Previous Revised Form
66.4 61.5 63.5 N/A
ISM Non-Manufacturing Prices
May
3rd, 2007
Actual Forecast Previous Revised Form
63.5 59.5 63.3 N/A
The report cites continuing concern on rising fuel and energy costs.

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