ISM Non-Manufacturing December 2010 Index - 57.1%

The ISM Non-manufacturing report for December 2010 is out. The overall index increased to 57.1%, 2.1 points higher than November's 55.0%. This report is also referred to as the services index, or service sector index.

 

 

New orders jumped 5.3 percentage points, business activity is humming, with a 6.5 percentage point increase from last month. Yet, here we are again, the employment index declined 2.2 percentage points. The employment index is at 50.5, which means these same companies which are hopping in activity are barely breaking even when it comes to adding any workers. Below is the table from the ISM services report, edited.

 

ISM NON-MANUFACTURING SURVEY RESULTS AT A GLANCE DECEMBER 2010
Index Series
Index
Dec.
Series
Index
Nov.
Percent
Point
Change
Direction Rate
of
Change
Trend**
(Months)
NMI/PMI 57.1 55.0 +2.1 Growing Faster 12
Business Activity/Production 63.5 57.0 +6.5 Growing Faster 13
New Orders 63.0 57.7 +5.3 Growing Faster 16
Employment 50.5 52.7 -2.2 Growing Slower 4
Supplier Deliveries 51.5 52.5 -1.0 Slowing Slower 9
Inventories 52.5 51.5 +1.0 Growing Faster 2
Prices 70.0 63.2 +6.8 Increasing Faster 17
Backlog of Orders 48.5 51.5 -3.0 Contracting From Growing 1
New Export Orders 56.0 59.5 -3.5 Growing Slower 4
Imports 51.0 54.5 -3.5 Growing Slower 5
Inventory Sentiment 61.5 60.0 +1.5 Too High Faster 163

 

Below is the graph for the December non-manufacturing ISM business activity index, which increased to 63.5%.

 

 

New orders also jumped to 63%.

 

 

Contrast the above with the employment index. Remember anything below 50 means contraction or in the case of workers, firing people. The below graph has been normalized to 50, the ISM inflection point for expansion versus contraction. Yeah, jobs are a flat line.

 

 

Prices dramatically increased by 6.8 percentage points to 70%. From the list of commodities that increased in price, reported below, it looks like our old friend oil is affecting businesses.

Airfares; Batteries; Beef; Copper Products; Cotton (2); Cotton Products (4); #1 Diesel Fuel (3); #2 Diesel Fuel (6); Fuel (12); Gasoline (3); Heating Fuel; Liner Bags; Paper (2); Polyester and Polyester Products; Polyethylene Bags; Service Labor; Soy Oil; Steel; Steel Products; Sugar; Transportation Costs; and Waste Management Services.

To read more sub-indices and details see the actual report (although no eye candy from the ISM).

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