ISM Non Manufacutiring Slightly Below Expectation at 53.3

While the ISM Manufacturing seems to get all the attention, we've shrunk that part of the economy to a quite small proportion of activity.  Most of the action nowadays is in the services sector, and hence today's ISM number is more applicable to the broader economy.  The reading of 53.3 is still expansionary but the second worst reading in 2011.  A bit below consensus as well, but thus far the market doesn't care as it continues to look forward to the Japan supply chain rebuild and hopes for 3%+ type of GDP in Q3/Q4.  As well as the very healthy outlook for corporations, especially the multinational kind which have increasingly less need for a healthy U.S. economy.

Specific to the ISM report, new orders shrunk relatively dramatically, and employment was flattish.  As with ISM Manufacturing the bright spot is a large drop in prices.

WHAT RESPONDENTS ARE SAYING ...

• "Business is still up, although some softening seen over last month." (Wholesale Trade)
• "Orders are remaining steady, and outlook for this year is positive." (Professional, Scientific & Technical Services)
• "Economic activity continues to be sluggish." (Management of Companies & Support Services)
• "Have yet to see a real spark that ignites new and invigorated business — still seems lethargic and mired in recession-related preventative moves, and no one sees a real improvement ahead." (Public Administration)
• "Commodities coming down in price, which should help stabilize inflation." (Retail Trade)

ISM NON-MANUFACTURING SURVEY RESULTS AT A GLANCE COMPARISON OF ISM NON-MANUFACTURING AND ISM MANUFACTURING SURVEYS* JUNE 2011
	Non-Manufacturing						Manufacturing
Index	Series Index Jun	Series Index May	Percent Point Change	Direction	Rate of Change	Trend** (Months)	Series Index Jun	Series Index May	Percent Point Change
NMI/PMI	53.3	54.6	-1.3	Growing	Slower	19	55.3	53.5	+1.8
Business Activity/Production	53.4	53.6	-0.2	Growing	Slower	23	54.5	54.0	+0.5
New Orders	53.6	56.8	-3.2	Growing	Slower	23	51.6	51.0	+0.6
Employment	54.1	54.0	+0.1	Growing	Faster	10	59.9	58.2	+1.7
Supplier Deliveries	52.0	54.0	-2.0	Slowing	Slower	15	56.3	55.7	+0.6
Inventories	53.5	55.0	-1.5	Growing	Slower	5	54.1	48.7	+5.4
Prices	60.9	69.6	-8.7	Increasing	Slower	23	68.0	76.5	-8.5
Backlog of Orders	48.5	55.0	-6.5	Contracting	From Growing	1	49.0	50.5	-1.5
New Export Orders	57.0	57.0	0.0	Growing	Same	10	53.5	55.0	-1.5
Imports	46.5	50.5	-4.0	Contracting	From Growing	1	51.0	54.5	-3.5
Inventory Sentiment	58.5	55.0	+3.5	Too High	Faster	169	N/A	N/A	N/A
Customers' Inventories	N/A	N/A	N/A	N/A	N/A	N/A	47.0	39.5	+7.5

* Non-Manufacturing ISM Report On Business^® data is seasonally adjus