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Economy in Brief

U.S. ISM Nonmanufacturing Index Dips
by Tom Moeller  August 3, 2016

The Composite Index of Nonmanufacturing Sector Business Activity from the Institute for Supply Management (ISM) eased to 55.5 during July after jumping to 56.5 in June. Expectations had been for 56.0 in the Action Economics Forecast Survey. The ISM data are diffusion indexes where readings above 50 indicate expansion.

Haver Analytics constructs a Composite Index using the nonmanufacturing ISM index and the ISM factory sector measure released Monday. It declined to 55.2, but remained above this year's average of 54.2. During the last ten years, there has been a 73% correlation between the index and the q/q change in real GDP.

Amongst the component series, a decline in the supplier delivery index to 51.0 led the way lower. In addition, the employment index eased to 51.4, but remained above break-even for the fifth month this year. During the last ten years, there has been a 96% correlation between the employment index and the m/m change in service plus construction payrolls. The new orders series increased to 60.3, its highest level in 9 months, and the business activity measure was little changed at 59.3.

The prices paid series declined to 51.9, the lowest level since March. Fifteen percent (NSA) of respondents paid higher prices while seven percent paid less.

The export order series increased to 55.5. The imports price series eased to 53.0. The order backlog figure rebounded to 51.0. Each of these last few readings is not seasonally adjusted

The figures are available in Haver's USECON database. The expectations figure from Action Economics is in the AS1REPNA database.

ISM Nonmanufacturing Survey (SA) Jul Jun May Jul'15 2015 2014 2013
Composite Diffusion Index 55.5 56.5 52.9 59.6 57.1 56.2 54.6
   Business Activity 59.3 59.5 55.1 63.4 60.8 59.7 56.6
   New Orders 60.3 59.9 54.2 62.6 59.2 58.6 55.8
   Employment 51.4 52.7 49.7 59.2 56.1 54.9 54.3
   Supplier Deliveries (NSA) 51.0 54.0 52.5 53.0 52.5 51.8 51.7
Prices Index 51.9 55.5 55.6 52.3 50.7 56.8 55.7
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