The Institute for Supply Mananagement’s
November report on U.S. non-manufacturing activityis out.
The headline index fell to 53.9 in November from October’s 55.4 reading, worse than the smaller drop to 55.0 expected by economists.
The reading suggests the pace of expansion in the American services sector slowed more than expected in November.
The employment sub-index fell to 52.5 from 56.5, suggesting a similar slowdown in the pace of hiring in services industries.
Below is what respondents to the ISM survey are saying:
- “Optimistic fourth quarter in sight.” (Information)
- “Slight slowdown in occupancy.” (Accommodation & Food Services)
- “Things are improving very slowly.” (Finance & Insurance)
- “Business is steady at this time, with little fluctuation from last month.” (Health Care & Social Assistance)
- “Regulatory uncertainty is having an effect on consumers who are spending, but not aggressively.” (Retail Trade)
- “Business remains steady, with gains in new orders and projections into 2014.” (Professional, Scientific & Technical Services)
- “We are clearly seeing a pickup in activity, which began in August.” (Wholesale Trade)
Earlier this morning, ADP released its monthly report on private sector employment, which estimated that 215,000 workers were added to private-sector payrolls in November — up from an upward-revised 184,000 in October and well above consensus estimates for a 170,000 print.
The release roiled the bond market as traders re-calibrated expectations for when the Federal Reserve is most likely to begin tapering down its quantitative easing program. 10-year U.S. Treasury futures are down more than 0.4%, and the yield on the 10-year note is 2.82%, 4 basis points above Tuesday’s close.
Other economic data reflecting activity in the month of November have surprised to the upside this week as well, including ISM’s monthly survey of U.S. manufacturing activity and monthly auto sales figures.
Traders will get two more big pieces of the taper puzzle Thursday and Friday with the release of Q3 GDP revisions and the all-important November jobs report, respectively.