Doug Short: Today the Institute for Supply Management published its latest Non-Manufacturing Report. The headline NMI Composite Index is at 54.0 percent, up from last month’s 53.0 percent. Today’s number came in slightly above the Investing.com forecast of 53.7 and the 53.8 consensus posted by Briefing.com.
Here is the report summary:
“The NMI® registered 54 percent in January, 1 percentage point higher than the seasonally adjusted reading of 53 percent registered in December. The Non-Manufacturing Business Activity Index increased to 56.3 percent, which is 2 percentage points higher than the seasonally adjusted reading of 54.3 percent reported in December, reflecting growth for the 54th consecutive month and at a faster rate. The New Orders Index increased to 50.9 percent, 0.5 percentage point higher than the seasonally adjusted reading of 50.4 registered in December. The Employment Index increased 0.8 percentage point to 56.4 percent from the December seasonally adjusted reading of 55.6 percent and indicates growth in employment for the 25th consecutive month and at a faster rate. The Prices Index increased 2.4 percentage points from the December seasonally adjusted reading of 54.7 percent to 57.1 percent, indicating prices increased at a faster rate in January when compared to December. According to the NMI®, eleven non-manufacturing industries reported growth in January. The majority of respondents’ comments reflect an improvement in business conditions. Some of the respondents indicate that weather conditions have impacted their business. There remains a bit of uncertainty about the overall economy for some of the survey respondents; however, the majority feel positive about continued economic growth.”
Like its much older kin, the ISM Manufacturing Series, I have been reluctant to focus on this collection of diffusion indexes. For one thing, there is relatively little history for ISM’s Non-Manufacturing data, especially for the headline Composite Index, which dates from 2008. The chart below shows Non-Manufacturing Composite. We have only a single recession to gauge is behavior as a business cycle indicator.
In my view, the more interesting and useful subcomponent is the Non-Manufacturing Business Activity Index. The latest data point at 55.2 percent is a -0.3 decline from the previous month.
For a diffusion index, this can be an extremely volatile indicator. Thus I’ve added a six-month moving average to assist us in visualizing the trend, which has been relatively range bound for the past two years.(...)Click here to continue reading the original ETFDailyNews.com article: ISM Non-Manufacturing: Up A Percent [Dow Jones Industrial Average(INDEXDJX:.DJI), SPDR S&P 500 ETF Trust]You are viewing an abbreviated republication of ETF Daily News content. You can find full ETF Daily News articles on (www.etfdailynews.com)
- ISM Manufacturing Index Comes In Well Below Expectations [Dow Jones Industrial Average(INDEXDJX:.DJI), SPDR S&P 500 ETF Trust]
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- Chicago Fed: Economic Growth Moderated In December [Dow Jones Industrial Average(INDEXDJX:.DJI), SPDR Dow Jones Industrial Average ETF]
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