A gauge of US service activity posts is biggest monthly jump since 1997 as the economy reopens

  • The Institute for Supply Management’s non-manufacturing index jumped 11.7 points to 57.1 in June, according to a Monday report.
  • It’s the largest ever single-month jump for the index, and pushes it to a four-month high following two months of contractions. It also exceeded the median economist estimate of a rise to 50.2.
  • “Respondents remain concerned about the coronavirus and the more recent civil unrest; however, they are cautiously optimistic about business conditions and the economy as businesses are beginning to reopen,” said Anthony Nieves, chair of the ISM’s Non-Manufacturing Business Survey Committee, in a statement.
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A gauge of US service activity exploded in June, posting its largest single-month jump ever as the economy reopened.

The Institute for Supply Management’s non-manufacturing index spiked a record 11.7 points in June to 57.1, a four-month high following two months of contractions, the organisation said Monday. The median economist estimate was for modest rise to 50.2, according to Bloomberg data.

The reading suggest that the economy is recovering from the coronavirus pandemic recession as states move forward with reopening plans – a number above 50 signals growth, while one below it signals a contraction. Still, growing coronavirus cases in some states threaten the trajectory of the recovery going forward.

“Respondents remain concerned about the coronavirus and the more recent civil unrest; however, they are cautiously optimistic about business conditions and the economy as businesses are beginning to reopen,” said Anthony Nieves, chair of the ISM’s Non-Manufacturing Business Survey Committee, in a statement.


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The Business Activity Index jumped 25 points to 66 in June, and the New Orders Index rose 19.7 points to 61.6 at the same time. The Employment Index increased 11.3 points to 43.1, according to the report. A year ago, the employment index was at 55.2, showing that the coronavirus crisis continues to weigh on the labour market.

Of the non-manufacturing indexes, 14 reported growth in June while three declined. Agriculture, accommodation and food services, and wholesale trade led the growing sectors, according to the report.

The ISM surveys, like all diffusion indexes, measure breadth of improvement rather than depth, which can make them prone to volatile swings.

“It is difficult to imagine a deterioration in activity below ‘lockdown’, so the reopening of economies around the country naturally produced a strong reading,” Thomas Simons of Jefferies wrote in a Monday note.

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