ISM Nonmanufacturing Shows Upside

The Institute For Supply Management is out with its July reading on the services sector. The ISM’s nonmanufacturing report came in at 52.6% for the overall index. This was up from the 52.1% reading in June, and it is even slightly higher than the 52.0% expected by Dow Jones and by Bloomberg. The overall activity was up, as were the new orders, but employment fell under the growth line of 50.0.

The breakdown is as follows:

• Business Activity Index came in at 57.2% versus 51.7% in June.
• New Orders Index at 54.3% versus 53.3% in June.
• Employment Index at 49.3% versus 52.3% in June.
• The Prices Index rose 6 points to 54.9%.

The report formally said:

The NMI registered 52.6 percent in July, 0.5 percentage point higher than the 52.1 percent registered in June. This indicates continued growth this month at a slighter faster rate in the non-manufacturing sector. The Non-Manufacturing Business Activity Index registered 57.2 percent, which is 5.5 percentage points higher than the 51.7 percent reported in June, reflecting growth for the 36th consecutive month. The New Orders Index increased by 1 percentage point to 54.3 percent. The Employment Index decreased by 3 percentage points to 49.3 percent, indicating contraction in employment for the first time since December 2011. The Prices Index increased 6 percentage points to 54.9 percent, indicating higher month-over-month prices when compared to June. According to the NMI, 11 non-manufacturing industries reported growth in July. Respondents’ comments are mixed and vary by industry and company.

Normally we would be giving this report more of a focus, but the unemployment and payrolls data from this morning is ruling the roost on the markets.

JON C. OGG