Institute for Supply Management’s Non-Manufacturing (Services) Index came in at 50.5 for January vs. 51 expected. Nevertheless, any value above 50 implies growth and January’s result was still an improvement over December.
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Breaking down the ISM index into its components, the Employment Index (within the total ISM Services calculation) remains well below the 50 level, though it improved slightly from December. This implies a tough space in the employment arena.
Yet given the payrolls data that came out from ADP today, which would have been positive if not for large construction-related job losses, housing related employment losses are probably to blame. Indeed ISM reported ‘Arts, Entertainment & Recreation’ and ‘Construction’ as the two worst-hit areas for employment.
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Interestingly, in the ISM Manufacturing release about two days back, the employment index showed growth, and overall the table above was essentially showing growth and improvement across the board as well. Thus manufacturing is clearly way ahead of services during this recovery so far.