The ISM Non-manufacturing report for September 2010 is out. The overall index increased to 53.2%, 1.7 points higher than August's 51.5%. This report is also referred to as the services index, or service sector index. While the press is all gaga over this report, once again we know why a picture is worth a thousand words, NMI is not breaking any records here for the last two years. The ISM indexes mean anything above 50 is growth, below 50 is contraction.
Below is the table from the ISM services report, edited. The best piece of news in this report is the 11.5 percentage point change on new export orders, with Professional, Scientific & Technical Services leading the pack. That's great for our imports to exports ratio currently is 4 to 1, and the trade deficit drags down economic growth to a crawl. That said, services is a very small portion of trade, most comes from goods, which has been decimated by offshore outsourcing. Services imports increased 2.5 percentage points.
| ISM NON-MANUFACTURING SURVEY RESULTS AT A GLANCE SEPTEMBER 2010 | ||||||
|---|---|---|---|---|---|---|
| Index | Series Index Sept. |
Series Index August |
Percent Point Change |
Direction | Rate of Change |
Trend (Months) |
| NMI/PMI | 53.2 | 51.5 | +1.7 | Growing | Faster | 9 |
| Business Activity/Production | 52.8 | 54.4 | -1.6 | Growing | Slower | 10 |
| New Orders | 54.9 | 52.4 | +2.5 | Growing | Faster | 13 |
| Employment | 50.2 | 48.2 | +2.0 | Growing | From Contracting | 1 |
| Supplier Deliveries | 55.0 | 51.0 | +4.0 | Slowing | Faster | 6 |
| Inventories | 47.0 | 53.5 | -6.5 | Contracting | From Growing | 1 |
| Prices | 60.1 | 60.3 | -0.2 | Increasing | Slower | 14 |
| Backlog of Orders | 48.0 | 50.5 | -2.5 | Contracting | From Growing | 1 |
| New Export Orders | 58.0 | 46.5 | +11.5 | Growing | From Contracting | 1 |
| Imports | 53.0 | 50.5 | +2.5 | Growing | Faster | 2 |
| Inventory Sentiment | 59.5 | 60.0 | -0.5 | Too High | Slower | 160 |
The worst news appears to be the business activity index, defined as general activity, which dropped 1.6 percentage points, shown in the St. Louis Fed FRED graph below:
New orders increased 1.6 percentage points to 54.9%.
While employment increased 2 percentage points, it's still anemic, barely registering any growth. The below graph is re-centered around the ISM index inflection point to show we just are not creating jobs here and hiring people!
To read more sub-indices and details see the actual report (although no eye candy from the ISM).
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