ISM Non-Manufacturing index for April 2010 at 55.4%

The ISM Non-manufacturing report for April 2010 is out. The overall index flat lined to 55.4%, exactly the same as last month's 55.4%.

 

 

The employment index is below 50, at 49.5% and decreased from last month. New orders also slowed. While still above 50, new orders decreased from last month, by -4.1%, although business activity barely budged, up 0.3%. Below is the graph, normalized to zero to show contraction, on employment from the survey, followed by a graph of new orders.

 

 

 

ISM NON-MANUFACTURING SURVEY RESULTS AT A GLANCE
Index Series
Index
Apr.
Series
Index
Mar.
Percent
Point
Change
Direction Rate
of
Change
Trend
NMI/PMI 55.4 55.4 0.0 Growing Same 4
Business Activity/Prod. 60.3 60.0 +0.3 Growing Faster 5
New Orders 58.2 62.3 -4.1 Growing Slower 8
Employment 49.5 49.8 -0.3 Contracting Faster 28
Supplier Deliveries 53.5 49.5 +4.0 Slowing From Faster 1
Inventories 54.5 46.5 +8.0 Growing From Contracting 1
Prices 64.7 62.9 +1.8 Increasing Faster 9
Backlog of Orders 49.5 55.5 -6.0 Contracting From Growing 1
New Export Orders 57.0 57.5 -0.5 Growing Slower 2
Imports 56.5 51.0 +5.5 Growing Faster 2
Inventory Sentiment 53.5 52.5 +1.0 Too High Faster 155

 

This is not a great report frankly. Firstly employment is contracting, secondly the inventory sentiment implies a further inventory reduction. Obviously a -4.1% decline in new orders is not a good sign either. One of the comments from retail said they would experience a slow down if prices continue to rise. Odds are, due to the Gulf oil spill, one thing is guaranteed to rise. Most disconcerting is the next ending employment contraction.

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