The June 2014 ISM non-manufacturing (aka services) index continues its growth cycle, but declined marginally from 56.3 to 56.0 (above 50 signals expansion). Important internals continued to show strong expansion – but the direction of movements were mixed.
This was within the range of market forecasts of 54.5 to 58.5 (consensus 56.2).
There are two sub-indexes in the NMI which have good correlations to the economy – the Business Activity Index and the New Orders Index – and both have good track records in spotting an incipient recession. The Business Activity Index weakened and the New Orders Index improved – with both remaining in expansion territory.
This index and its associated sub-indices are fairly volatile – and one needs to step back from the data and view this index over longer periods than a single month.
The Business Activity sub-index lost 4.6 points and now is at 57.5.
ISM Services – Business Activity Sub-Index
The New Orders Index gained 0.7 and is currently at 61.2.
ISM Services – New Orders Sub-Index
The complete ISM manufacturing and non-manufacturing survey table is below.
Econintersect does give serious consideration to this survey as the service sector accounts for 80% of the economy and 90% of employment. However, this an opinion survey and is not hard data.
From the ISM report:
