In the first bit of disappointing news in a while, ISM Non Manufacturing (which covers a much broader piece of the U.S. economy than manufacturing) came in below expectation at 52.0 (v 53.9). That said it is still expansionary (at >50) but continues to point to a "meh" muddle through economy... slightly expansionary, hooked on government steroids, but nothing to write home about. Unfortunately, the lowest reading since January 2010.
Key subindexes (new orders better, employment and prices 'worse')
New orders down 0.9
Employment down 4.4
Prices up 5.5
Full report here.
Non-Manufacturing Business Survey Committee. "The NMI registered 52 percent in November, 0.9 percentage point lower than the 52.9 percent registered in October, and indicating continued growth at a slightly slower rate in the non-manufacturing sector. This is the lowest reading since January 2010, when the index registered 50.7 percent. The Non-Manufacturing Business Activity Index increased 2.4 percentage points to 56.2 percent, reflecting growth for the 28th consecutive month. The New Orders Index increased by 0.6 percentage point to 53 percent. The Employment Index decreased 4.4 percentage points to 48.9 percent, indicating contraction in employment after one month of growth. The Prices Index increased 5.4 percentage points to 62.5 percent, indicating prices increased at a faster rate in November when compared to October. According to the NMI, 12 non-manufacturing industries reported growth in November. Respondents' comments for the most part project continued slow, incremental growth. There still remains a strong concern about lagging employment."
WHAT RESPONDENTS ARE SAYING...
- "Business activity continues to swing back and forth. Customer traffic remains lower than expected, but discretionary spending is fluctuating, making it difficult to find the pulse of the consumer." (Arts, Entertainment & Recreation)
- "Lending is getting a little better. Competition for good deals is fierce because there remains a very limited number of high-quality borrowers." (Finance & Insurance)
- "Raw materials prices appear to be stabilizing, and in some cases are dropping. Diesel fuels remain elevated and have not dropped." (Mining)
- "We currently see no signs of a turnaround. Customers are nervous about the future of their jobs and incomes. Due to this fact, our sales are down and our need to hire more employees is, too." (Accommodation & Food Services)
- "Business is slowly improving. Outlook for the next few months is good." (Retail Trade)
- "In the face of an extremely tight business climate, prices continue to be sticky. We are not seeing significant price moderation." (Management of Companies & Support Services)
|ISM NON-MANUFACTURING SURVEY RESULTS AT A GLANCE|
COMPARISON OF ISM NON-MANUFACTURING AND ISM MANUFACTURING SURVEYS*
|Supplier Deliveries||50.0||52.0||-2.0||Unchanged||From Slowing||1||49.9||51.3||-1.4|
|Backlog of Orders||48.0||47.0||+1.0||Contracting||Slower||2||45.0||47.5||-2.5|
|New Export Orders||55.5||54.0||+1.5||Growing||Faster||4||52.0||50.0||+2.0|
|Inventory Sentiment||63.0||57.5||+5.5||Too High||Faster||174||N/A||N/A||N/A|
* Non-Manufacturing ISM Report On Business®