Service sector employee, nurse at a hospital. (Photo: REUTERS)
The Non-Manufacturing (NMI) Report On Business, the Institute of Supply Management (ISM) gauge of service sector activity, increased to 57.1 in September. The reading, which marks an 11-month high, or the highest level since October 2015, followed a steep drop in August and topped the forecast of 53.0.
A reading above 50 indicates expansion in the service sector.
Increases in the index during September were broad-based, as business activity and the employment sub-indices both reached 11-month highs. The report was in line with the ADP National Employment Report released on Wednesday showing U.S. private employers added 154,000 jobs in September, slightly below economists’ expectations. The report continued to find the service, which accounts for more than two-thirds of U.S. economic activity, led the way industry-wise.
However, with wages stagnant or at best rising slowly, the lower-paying service sector is welcomed growth but not enough needed to move the needle. The more closely-watched monthly U.S. jobs report is scheduled for release on Friday.
The Commerce Department also reported earlier on Wednesday that the U.S. trade deficit rose more than expected in August as a sharp increase in imports easily offset higher exports. The trade gap widened 3% to $40.73 billion.
| ISM® NON-MANUFACTURING SURVEY RESULTS AT A GLANCE COMPARISON OF ISM® NON-MANUFACTURING AND ISM® MANUFACTURING SURVEYS* SEPTEMBER 2016 |
|||||||||
|---|---|---|---|---|---|---|---|---|---|
| Non-Manufacturing | Manufacturing | ||||||||
| Index | Series Index Sep |
Series Index Aug |
Percent Point Change |
Direction | Rate of Change |
Trend** (Months) |
Series Index Sep |
Series Index Aug |
Percent Point Change |
| NMI®/PMI® | 57.1 | 51.4 | +5.7 | Growing | Faster | 80 | 51.5 | 49.4 | +2.1 |
| Business Activity/Production | 60.3 | 51.8 | +8.5 | Growing | Faster | 86 | 52.8 | 49.6 | +3.2 |
| New Orders | 60.0 | 51.4 | +8.6 | Growing | Faster | 86 | 55.1 | 49.1 | +6.0 |
| Employment | 57.2 | 50.7 | +6.5 | Growing | Faster | 4 | 49.7 | 48.3 | +1.4 |
| Supplier Deliveries | 51.0 | 51.5 | -0.5 | Slowing | Slower | 9 | 50.3 | 50.9 | -0.6 |
| Inventories | 51.5 | 48.0 | +3.5 | Growing | From Contracting | 1 | 49.5 | 49.0 | +0.5 |
| Prices | 54.0 | 51.8 | +2.2 | Increasing | Faster | 6 | 53.0 | 53.0 | 0.0 |
| Backlog of Orders | 52.0 | 49.5 | +2.5 | Growing | From Contracting | 1 | 49.5 | 45.5 | +4.0 |
| New Export Orders | 56.5 | 46.5 | +10.0 | Growing | From Contracting | 1 | 52.0 | 52.5 | -0.5 |
| Imports | 51.0 | 50.5 | +0.5 | Growing | Faster | 8 | 49.0 | 47.0 | +2.0 |
| Inventory Sentiment | 64.5 | 64.0 | +0.5 | Too High | Faster | 232 | N/A | N/A | N/A |
| Customers’ Inventories | N/A | N/A | N/A | N/A | N/A | N/A | 53.0 | 49.5 | +3.5 |
| Overall Economy | Growing | Faster | 86 | ||||||
| Non-Manufacturing Sector | Growing | Faster | 80 | ||||||
* Non-Manufacturing ISM® Report On Business® data is seasonally adjusted for Business Activity, New Orders, Prices and Employment Indexes. Manufacturing ISM® Report On Business® data is seasonally adjusted for New Orders, Production, Employment and Supplier Deliveries.
** Number of months moving in current direction.
