ISM Services PMI Data Surprises to the Upside
- US non-manufacturing (services) November: 56.5 vs 53.3 exp (54.4 prior)
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The November report showed an increase in the rate of growth due to increases in business activity and employment. In addition, 13 industries reported growth and the composite index grew for the 30th consecutive month after the contractions of April and Mat 2020. In fact, the services sector has expanded for all but two of the last 154 months and continues to reveal the resilience of the US economy.
Improvements on the October report:
- Business activity
- Employment
- Inventories
- Imports
Prices: The prices element of the report was seen declining from 70.7 to 70 in November, another indication of easing price pressures to add to the welcome CPI drop on November the 10th. PPI on Friday could also weigh in on the inflation debate when those figures are released.
The US services sector is the largest single sector for the worlds largest economy and so, understandably, requires a lot of attention. Questions about the strength of the US economy gained traction after Q2 when two successive quarters of negative GDP growth were recorded. While this met the technical definition of a recession, many commentators and even the US Treasury Secretary preferred to dismiss the view that the US economy was in a recession and pointed to the unusually low unemployment rate.
Since then there has been a remarkable turnaround in GDP growth which has seen a positive Q3 number and has the Federal Reserve tracking Q4 for a decent holiday quarter.
— Written by Richard Snow for DailyFX.com
Contact and follow Richard on Twitter: @RichardSnowFX
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