U.S. ISM Services PMI Edges Up in February; Prices Rise
by:Tom Moeller
|in:Economy in Brief
Summary
- Total index has trended higher since 2024 low.
- Employment leads upturn; new orders & supplier deliveries edge up.
- Prices Index moves higher.
The U.S. ISM Services PMI rose to 53.5 during February after falling to 52.8 in January, according to today’s report by the Institute for Supply Management. The reading indicated service sector expansion for the eighth consecutive month. The Action Economics Forecast Survey expected 53.0 for February.
Haver Analytics constructs a composite index combining the services index and the manufacturing index released on Monday. This index rose to 53.1 in February from 52.6 in January. The latest figure remains above its June low of 49.1.
Amongst the services component series, the employment index led last month’s improvement in the overall index. It rose to 53.9 from 52.3, up from 48.0 twelve months earlier. Higher employment was reported by 19.3% of respondents while 15.0% reported a decline. The new orders index rose to 52.2 after falling to 51.3 in January. The supplier delivery series rose to 53.4 last month after rising to 53.0. The business activity series eased to 54.4 from 54.5 in January.
On the inflation front, the prices index rose to 62.6 in February after declining to 60.4 in January. An increased 32.4% (NSA) of respondents reported higher prices while a higher 4.6% reported lower prices.
Additionally, the new export orders index increased to 52.1 (NSA) in February following a rise to 52.0 in January. The imports index eased to 49.6 last month from 49.8 in December. The inventory change index rose to 50.6 after falling to 47.5 in January. These series are not seasonally adjusted and not included in the ISM Services PMI total.
The ISM Services PMI is a composite index consisting of four equally weighted diffusion indexes: Business Activity, New Orders, Employment, and Supplier Deliveries. A reading above 50 indicates expansion in the services sector, while below 50 suggests contraction. Supplier Deliveries is the only ISM index that is inversed; a reading above 50 indicates slower deliveries. The ISM figures are available in Haver's USECON database, with additional detail in the SURVEYS database. The expectations figure from Action Economics is in the AS1REPNA database.
Tom Moeller
AuthorMore in Author Profile »Prior to joining Haver Analytics in 2000, Mr. Moeller worked as the Economist at Chancellor Capital Management from 1985 to 1999. There, he developed comprehensive economic forecasts and interpreted economic data for equity and fixed income portfolio managers. Also at Chancellor, Mr. Moeller worked as an equity analyst and was responsible for researching and rating companies in the economically sensitive automobile and housing industries for investment in Chancellor’s equity portfolio. Prior to joining Chancellor, Mr. Moeller was an Economist at Citibank from 1979 to 1984. He also analyzed pricing behavior in the metals industry for the Council on Wage and Price Stability in Washington, D.C. In 1999, Mr. Moeller received the award for most accurate forecast from the Forecasters' Club of New York. From 1990 to 1992 he was President of the New York Association for Business Economists. Mr. Moeller earned an M.B.A. in Finance from Fordham University, where he graduated in 1987. He holds a Bachelor of Arts in Economics from George Washington University.
More Economy in Brief
