July 6, 2017 – The ISM Non-Manufacturing Index helps determine overall conditions in the services sector. Components evaluated are employment, business activity, new orders, and supplier deliveries. The non-manufacturing sector represents a much larger share of the overall U.S. economy when compared to the manufacturing sector, making up approximately 80%. Readings above 50 indicate an expansion while readings below 50 signal decline.
The ISM non-manufacturing index came in above the consensus of 56.5 at 57.4 and above the previous month of 56.9. New orders came in 2.8% higher month-to-month at 60.5. The employment index dropped 2 points from May to June at 55.8. Business activity was at 60.8, barely up from 60.7. The non-manufacturing price index is also up 2.9 % month-to-month to 52.1.
This index has been in the expansion range for 90 consecutive months and we expect that to continue. 16 of the 18 industries have reported growth in June. Growth returned to the highest levels of the past 12 months and shows no signs of dropping below the expansion level of 50. This is a promising sign as a large portion of the economy is represented in the services sector.