 | The ISM Non-Manufacturing Index Rose to 54.0 in January |
|
| Posted Under: Autos • Data Watch • Employment • ISM Non-Manufacturing |
Implications: After a surprise on the low side from the ISM manufacturing report, today's ISM service sector report surprised on the upside. The ISM services report came in at a healthy 54.0 in January, above consensus expectations and showing expansion for the 49th consecutive month. The business activity index – which has a stronger correlation with economic growth than the overall index – increased to 56.3, signaling solid economic growth. The best part of the report was a 0.8 point increase in the employment index, to 56.4. The employment index now stands at its highest level since November of 2010. The new orders index rose to 50.9 in January, reversing four months of declines and keeping the index in expansion territory. On the inflation front, the prices paid index ticked higher to 57.1 in January from 54.7 in December. Still no sign of runaway inflation, but given loose monetary policy, we expect this measure to move upward over the coming year. In other news this morning, the ADP Employment index, which measures private-sector payrolls, increased 175,000 in January. Our models now say the official Labor Department report (released Friday morning) will show a gain of 151,000 for both nonfarm and private payrolls. In other recent news, automakers sold cars and light trucks at a 15.2 million annual rate in January, down 1% from December, up only 0.1% from a year ago, and below the consensus expected pace of 15.7 million. According to NOAA, this was the coldest January in the last 20 years. As a result, take any soft January data with multiple grains of salt (if you have any left after using it on the roads).
Click here for a PDF version
|
|