Post by Admin on Aug 6, 2013 8:02:03 GMT 8
U.S. ISM Non-Manufacturing Index Soars
The U.S. non-manufacturing sector's expansion picked up steam in July, according to data released Monday by the Institute for Supply Management. Employment, however, softened slightly.
The ISM's non-manufacturing purchasing managers' index increased to 56.0 in July from 52.2 in June. The July reading is the highest since February.
Forecasters surveyed by Dow Jones Newswires had expected last month's PMI to increase but only to 53.3. Readings above 50 indicate activity is expanding.
"Comments from respondents include: "Large projects starting" and "Volumes are slightly higher, mostly due to housing'," the report said.
Last week, the ISM's survey of manufacturing also beat expectations showing a surprisingly strong level of factory activity in July. That report--along with some other solid job-related data--raised expectations for the July change in nonfarm payrolls, with some forecasts at 200,000 jobs. However, on Friday the Labor Department reported a modest gain of just 162,000 jobs added last month.
For the non-manufacturing sector, which comprises mainly private service providers, the ISM subindexes were mixed but expansionary.
The new orders index bounced up to 57.7 in July from 50.8 in June. The business activity/production index jumped to 60.4--highest since December 2012--from 51.7 in June.
The employment index, however, last month remained volatile. It slipped to 53.2 after it bounced back to 54.7 in June from a very weak 50.1 in May. The nonfarm payrolls report showed private-service jobs increased 157,000 last month, the smallest gain since March.
The ISM inventory index slowed to 53.5 from 54.5 in June.
Cost pressures among non-manufacturers continued to increase last month. The prices index jumped to 60.1 from 52.5. Some items with increased prices included airfare, beef, and corrugated boxes.
The ISM non-manufacturing report is composed mainly of comments from service-sector companies that make up the bulk of the U.S. economy, but it also includes construction and public administration.
Write to Kathleen Madigan at kathleen.madigan@dowjones.com
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www.nasdaq.com/article/us-ism-non-manufacturing-index-soars-20130805-00604