The ISM services index for September beat expectations, coming in at 53.2 vs. 51.8 expected, and 51.5 in August.
Examining the ISM’s sub-indices, employment has begun expanding again after a brief contraction. New export orders have also begun expanding again.
However, inventories and order backlogs have stopped growing.
“The NMI (Non-Manufacturing Index) registered 53.2 per cent in September, 1.7 percentage points higher than the 51.5 per cent registered in August, indicating continued growth in the non-manufacturing sector at a faster rate. The Non-Manufacturing Business Activity Index decreased 1.6 percentage points to 52.8 per cent, reflecting growth for the 10th consecutive month, but at a slower rate than in August. The New Orders Index increased 2.5 percentage points to 54.9 per cent, and the Employment Index increased 2 percentage points to 50.2 per cent, indicating growth in employment for the third time in the last five months. The Prices Index decreased 0.2 percentage point to 60.1 per cent, indicating that prices increased in September at a slightly slower rate. According to the NMI, 11 non-manufacturing industries reported growth in September. Respondents’ comments continue to be mixed about business conditions, with a slight majority reflecting optimism.”
The latest increase for the overall ISM means that the August slow-down appears to have ended, but the expansion of activity in the services sector is still weaker than in July when the index was 54.3, and the peak for 2010 of 55.4 that existed from March to May.