ISM Non Manufacturing Rockets to 56.8 vs Expectation of 53.2

Submitted by Mark Hanna

Courtesy of MarketMontage. View original post here.

The hits keep on coming. ISM Non Manufacturing was a huge beat at 56.8 v 53.2. (last month 52.6) In my eyes the data in this report is far more important than the ISM Manufacturing that tends to get much more attention, as it reflects far more of the U.S. economy.

In terms of the sub indexes, new orders surged 4.8, employment 7.6, and prices only 1.5. That’s about as good of a combo as you could ask for.

Full report here.

Non-Manufacturing Business Survey Committee. “The NMI registered 56.8 percent in January, 3.8 percentage points higher than the seasonally adjusted 53 percent registered in December, and indicating continued growth at a faster rate in the non-manufacturing sector. The Non-Manufacturing Business Activity Index registered 59.5 percent, which is 3.6 percentage points higher than the seasonally adjusted 55.9 percent reported in December, reflecting growth for the 30th consecutive month. The New Orders Index increased by 4.8 percentage points to 59.4 percent, and the Employment Index increased by 7.6 percentage points to 57.4 percent, indicating substantial growth in employment after one month of contraction. The Prices Index increased 1.5 percentage points to 63.5 percent, indicating prices increased at a slightly faster rate in January when compared to December. According to the NMI, 12 non-manufacturing industries reported growth in January. Respondents’ comments are mostly positive about business conditions. There is concern about cost pressures and the sustainability of the recent spike in activity.”

WHAT RESPONDENTS ARE SAYING …

“Overall business conditions to improve. We continue to outperform previous business cycles.” (Information)
“We are seeing increased contractor bidding and activity in Q1 2012.” (Construction)
“Small business borrowing continues to be slow.” (Finance & Insurance)
“New fiscal year, new budgets — expecting to show an increase in sales in first quarter.” (Other Services)
“Economy continues to show signs of improvement and the company revenue is improving slightly, but is very susceptible to pricing and cost pressures.” (Professional, Scientific & Technical Services)
“There seems to be some stabilization in the economy as well as [in the] supply chain. This seems to be calming inventory and sales positions.” (Retail Trade)
“Business is still stable; however, inflation in food prices is still a problem.” (Wholesale Trade)

ISM NON-MANUFACTURING SURVEY RESULTS AT A GLANCE COMPARISON OF ISM NON-MANUFACTURING AND ISM MANUFACTURING SURVEYS* JANUARY 2012
	Non-Manufacturing						Manufacturing
Index	Series Index Jan	Series Index Dec	Percent Point Change	Direction	Rate of Change	Trend** (Months)	Series Index Jan	Series Index Dec	Percent Point Change
NMI/PMI	56.8	53.0	+3.8	Growing	Faster	25	54.1	53.1	+1.0
Business Activity/Production	59.5	55.9	+3.6	Growing	Faster	30	55.7	58.9	-3.2
New Orders	59.4	54.6	+4.8	Growing	Faster	30	57.6	54.8	+2.8
Employment	57.4	49.8	+7.6	Growing	From Contracting	1	54.3	54.8	-0.5
Supplier Deliveries	51.0	51.5	-0.5	Slowing	Slower	2	53.6	51.5	+2.1
Inventories	47.0	48.5	-1.5	Contracting	Faster	2	49.5	45.5	+4.0
Prices	63.5	62.0	+1.5	Increasing	Faster	30	55.5	47.5	+8.0
Backlog of Orders	49.5	45.5	+4.0	Contracting	Slower	4	52.5	48.0	+4.5
New Export Orders	56.5	51.0	+5.5	Growing	Faster	6	55.0	53.0	+2.0
Imports	55.0	54.0	+1.0	Growing	Faster	2	52.5	54.0	-1.5
Inventory Sentiment	58.5	59.5	-1.0	Too High	Slower	176	N/A	N/A	N/A
Customers’ Inventories	N/A	N/A	N/A	N/A	N/A	N/A	47.5	42.5	+5.0

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