Big Miss in ISM Non-Manufacturing at 52.8

Wow, quite a doozy this morning from the ISM Non-Manufacturing figure - 52.8.  This is a huge drop from 57.3 in March, and way below expectations of 57.8.  While Monday's ISM Manufacturing gets all the press, that is only 11% of the economy, whereas the service sector dominates.  We will have to see in 30 days if this was an anomaly of some sort.  New orders were obliterated.  Prices paid dropped from 72.1 to 70.1 - interesting how this report is the polar opposite of manufacturing.

(for those new to these reports, above 50 = expansion, below 50 = contraction)

On the plus side... the slowdown in many economic figures the past 8 weeks sets us up well for QE3! Booyah!

Full report here.

WHAT RESPONDENTS ARE SAYING ...

• "Business conditions [remain] unchanged. No supply impact from the Japan earthquake/tsunami, but continue to track with the supply base." (Management of Companies & Support Services)
• "Revenues are picking up slowly, but the growth is positive as compared to last month and the same month last year." (Real Estate, Rental & Leasing)
• "Looking forward with reserved caution. Cost of goods by this fall are a big worry." (Accommodation & Food Services)
• "Continuing economic uncertainty will curtail or delay project spending for the immediate future." (Educational Services)
• "Fuel prices continue to be challenging and in addition to shipping, are influencing the cost of materials." (Public Administration)
• "We are seeing price increases in many areas, and the lead times are stretching out. Our business activities are improving at a moderate rate." (Wholesale Trade)

ISM NON-MANUFACTURING SURVEY RESULTS AT A GLANCE COMPARISON OF ISM NON-MANUFACTURING AND ISM MANUFACTURING SURVEYS* APRIL 2011
	Non-Manufacturing						Manufacturing
Index	Series Index Apr.	Series Index Mar.	Percent Point Change	Direction	Rate of Change	Trend** (Months)	Series Index Apr.	Series Index Mar.	Percent Point Change
NMI/PMI	52.8	57.3	-4.5	Growing	Slower	17	60.4	61.2	-0.8
Business Activity/Production	53.7	59.7	-6.0	Growing	Slower	21	63.8	69.0	-5.2
New Orders	52.7	64.1	-11.4	Growing	Slower	21	61.7	63.3	-1.6
Employment	51.9	53.7	-1.8	Growing	Slower	8	62.7	63.0	-0.3
Supplier Deliveries	53.0	51.5	+1.5	Slowing	Faster	13	60.2	63.1	-2.9
Inventories	55.5	55.5	0.0	Growing	Same	3	53.6	47.4	+6.2
Prices	70.1	72.1	-2.0	Increasing	Slower	21	85.5	85.0	+0.5
Backlog of Orders	55.5	56.0	-0.5	Growing	Slower	4	61.0	52.5	+8.5
New Export Orders	53.5	59.0	-5.5	Growing	Slower	8	62.0	56.0	+6.0
Imports	57.0	50.0	+7.0	Growing	From Unchanged	1	55.5	56.5	-1.0
Inventory Sentiment	57.5	67.0	-9.5	Too High	Slower	167	N/A	N/A	N/A
Customers' Inventories	N/A	N/A	N/A	N/A	N/A	N/A	40.5	39.5	+1.0