This morning came the report from the Institute of Supply Management for non-manufacturing in the month of June. The good news is that this was slightly better than expectations. The bad news is that is still contracting on all fronts. The Non-Manufacturing Index came in at 47% versus a Bloomberg consensus of 46.7%. The reading has to go north of 50.0% to get into “growth” in the economy.
The data is still showing a contraction even with the May reading being 44.0%. The two ‘flow’ components were close to 50.0%. The Business Activity Index came in at 49.8% and the New Orders Index came in at 48.6%. These numbers were compared to 42.4% and 44.4% respectively in May.
It was the Employment Index coming in at 43.4% which kept the lid on this reported number. Still, this rose from 39.0 in April.
The Institute for Supply Management considers all of these figures as “Contracting, but slower.” This won’t appease or change the minds of the bears. The green shoots crowd might try to point to the notion that things are almost back above positive in the service sector. Except for all those jobs that keep getting lost.
Jon C. Ogg
July 6, 2009
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