Economy

ISM: U.S. Service Sector Growth Stalls in December

A service sector employee sits at his desk. (Photo: REUTERS)

The Non-Manufacturing ISM Report On Business, the Institute for Supply Management gauge of service-sector growth, was unchanged in December at 57.2. Still, the reading topped the median economic forecast that was looking for a reading of 56.6.

Readings above 50 indicate expansion, while those below point to contraction.

“This represents continued growth in the non-manufacturing sector at the same rate,” said Anthony Nieves, chair of the Institute for Supply Management (ISM) Non-Manufacturing Business Survey Committee. “The Non-Manufacturing Business Activity Index decreased to 61.4%, 0.3 percentage point lower than the November reading of 61.7 percent, reflecting growth for the 89th consecutive month, at a slightly slower rate in December.”

The 12 non-manufacturing industries reporting growth in December — listed in order — are: Mining; Retail Trade; Finance & Insurance; Information; Arts, Entertainment & Recreation; Construction; Other Services; Health Care & Social Assistance; Professional, Scientific & Technical Services; Utilities; Transportation & Warehousing; and Accommodation & Food Services.

“The New Orders Index registered 61.6%, 4.6 percentage points higher than the reading of 57% in November,” Mr. Nieves added. The Employment Index decreased 4.4 percentage points in December to 53.8% from the November reading of 58.2%.”

The 3 industries reporting contraction in December are: Public Administration; Wholesale Trade; and Agriculture, Forestry, Fishing & Hunting.

The Prices Index increased 0.7 percentage point to 57%, up from the November reading of 56.3%. The slight gain indicated prices increased in December for the ninth consecutive month at a slightly faster rate.

ISM^® NON-MANUFACTURING SURVEY RESULTS AT A GLANCE COMPARISON OF ISM^® NON-MANUFACTURING AND ISM^® MANUFACTURING SURVEYS* DECEMBER 2016
	Non-Manufacturing						Manufacturing
Index	Series Index Dec	Series Index Nov	Percent Point Change	Direction	Rate of Change	Trend** (Months)	Series Index Dec	Series Index Nov	Percent Point Change
NMI^®/PMI^®	57.2	57.2	0.0	Growing	Same	83	54.7	53.2	+1.5
Business Activity/Production	61.4	61.7	-0.3	Growing	Slower	89	60.3	56.0	+4.3
New Orders	61.6	57.0	+4.6	Growing	Faster	89	60.2	53.0	+7.2
Employment	53.8	58.2	-4.4	Growing	Slower	7	53.1	52.3	+0.8
Supplier Deliveries	52.0	52.0	0.0	Slowing	Same	12	52.9	55.7	-2.8
Inventories	52.0	51.5	+0.5	Growing	Faster	4	47.0	49.0	-2.0
Prices	57.0	56.3	+0.7	Increasing	Faster	9	65.5	54.5	+11.0
Backlog of Orders	48.0	51.0	-3.0	Contracting	From Growing	1	49.0	49.0	0.0
New Export Orders	53.0	57.0	-4.0	Growing	Slower	4	56.0	52.0	+4.0
Imports	50.0	54.0	-4.0	Unchanged	From Growing	1	50.5	50.5	0.0
Inventory Sentiment	61.5	60.5	+1.0	Too High	Faster	235	N/A	N/A	N/A
Customers’ Inventories	N/A	N/A	N/A	N/A	N/A	N/A	49.0	49.0	0.0
Overall Economy				Growing	Same	89
Non-Manufacturing Sector				Growing	Same	83

* 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.

The Non-Manufacturing ISM® Report On Business® is based on data compiled from purchasing and supply executives nationwide. Membership of the Non-Manufacturing Business Survey Committee is diversified by NAICS, based on each industry’s contribution to gross domestic product (GDP).

READ FULL STORY

Subscribe Sign In

PPD Business Staff

PPD Business, the economy-reporting arm of People's Pundit Daily, is "making sense of current events." We are a no-holds barred, news reporting pundit of, by, and for the people.