Skip to Main Content

Article Attachment

The attached file contains this articles commentary as well as tables and charts of the data.

ISM Non Manufacturing: Moderate Expansion

July 6, 2016
Bottom Line: Business activity in the services, construction, and government sectors of the economy accelerated moderately in June, more than expectations. The level of activity increased with a jump in new orders and increase in export orders. Employment increased modestly. ISM Non-Manufacturing Employment index has had strong correlation with the total nonfarm payrolls ex-manufacturing growth in the past. This would normally suggest a better payroll number than last month, close to the current expectations for 180k non-farm payroll growth on Friday.

The ISM Non-Manufacturing Index ROSE by 3.6 points in June to 56.5%, its highest since November 2015, compared with market expectations for an increase to 53.3%. The June reading was slightly higher than its average level over the past 12 months. That said, this was also the 76th consecutive month that the non-manufacturing sector has expanded and the current level of the index indicates that the economy is growing moderately.

New Orders rose by 5.7 points to 59.9% as demand expanded for the 77th month. Order Backlogs declined modestly. Inventories increased moderately. Employment grew by 3.0 points to 52.7%, indicating that Friday's employment report should be on the modest side. Prices fell by 0.1 points to 55.5%.
Article by contingentmacro