ISM August Services Index still in Contraction

The phrase that comes to mind is mixed bag. Today the ISM Services index for August came in at 48.4%. Anything below 50 is a contraction, i.e. still a recession. It's 2% higher than last month. There is also a little indicator of inflation, the prices index is up to 63.1%.

"The NMI (Non-Manufacturing Index) registered 48.4 percent in August, 2 percentage points higher than the 46.4 percent registered in July, indicating contraction in the non-manufacturing sector for the 11th consecutive month but at a slower rate. The Non-Manufacturing Business Activity Index increased 5.2 percentage points to 51.3 percent. This is the first time this index has reflected growth since September 2008. The New Orders Index increased 1.8 percentage points to 49.9 percent, and the Employment Index increased 2 percentage points to 43.5 percent. The Prices Index increased 21.8 percentage points to 63.1 percent in August, indicating a substantial increase in prices paid from July. According to the NMI, six non-manufacturing industries reported growth in August. Respondents' comments are mixed about business conditions and the overall economy; however, there is an increase in comments indicating that there are signs of improvement going forward."

ISM NON-MANUFACTURING SURVEY RESULTS AT A GLANCE
AUGUST 2009
  Non-Manufacturing  
Index Series
Index
August
Series
Index
July
Percent
Point
Change
Direction Rate
of
Change
Trend**
(Months)
     
NMI/PMI 48.4 46.4 +2.0 Contracting Slower 11      
Bus. Activity 51.3 46.1 +5.2 Growing From Contracting 1      
New Orders 49.9 48.1 +1.8 Contracting Slower 11      
Emp. 43.5 41.5 +2.0 Contracting Slower 16      
Supplier Deliveries 49.0 50.0 -1.0 Faster From Unchanged 1      
Inv. 43.0 47.0 -4.0 Contracting Faster 12      
Prices 63.1 41.3 +21.8 Increasing From Decreasing 1      
Backlog  Orders 41.0 42.0 -1.0 Contracting Faster 13      
New Export Orders 54.0 47.5 +6.5 Growing From Contracting 1      
Imports 49.0 45.0 +4.0 Contracting Slower 10      
Inventory Sentiment 67.5 62.5 +5.0 Too High Faster 147      
Customers' Inventories N/A N/A N/A N/A N/A N/A      

 

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