Blowout ISM Non Manufacturing Number

Submitted by Mark Hanna

Courtesy of MarketMontage. View original post here.

A very hot number here at 58.6, 2.6 points over last month’s 56 and over expectations of 55. One of the biggest beats in a long while on this figure. New orders jumped 2.8, employment 3.8 – both big improvements. This is helping to push the 10 year Treasury yield up near 3.0%. An interesting setup going into tomorrow’s job number. Full report here.

“The NMI™ registered 58.6 percent in August, 2.6 percentage points higher than the 56 percent registered in July. This indicates continued growth at a faster rate in the non-manufacturing sector. This month’s NMI™ is the highest reading for the index since its inception in January 2008. The Non-Manufacturing Business Activity Index increased to 62.2 percent, which is 1.8 percentage points higher than the 60.4 percent reported in July, reflecting growth for the 49th consecutive month. The New Orders Index increased by 2.8 percentage points to 60.5 percent, and the Employment Index increased 3.8 percentage points to 57 percent, indicating growth in employment for the 13th consecutive month. The Prices Index decreased 6.7 percentage points to 53.4 percent, indicating prices increased at a significantly slower rate in August when compared to July. According to the NMI™, 16 non-manufacturing industries reported growth in August. The majority of respondents’ comments continue to be mostly positive about business conditions and the direction of the overall economy.”

WHAT RESPONDENTS ARE SAYING …

“High demand for products is driving expansion.” (Management of Companies & Support Services)
“We continue to see growth in the retail and wholesale sectors of our business, and expect to see new orders for our products continue to grow as well.” (Information)
“We seem to have a flurry of activity in our pipeline.” (Construction)
“Business orders are up and improving. Still concerned about sustainability through Q4.” (Professional, Scientific & Technical Services)
“Experiencing a strong housing rebound and continued solid performance by the tourism sector.” (Public Administration)
“Conditions continue to show improvement.” (Retail Trade)
“Generally slow, increasing economy.” (Transportation & Warehousing)

ISM NON-MANUFACTURING SURVEY RESULTS AT A GLANCE COMPARISON OF ISM NON-MANUFACTURING AND ISM MANUFACTURING SURVEYS* AUGUST 2013
	Non-Manufacturing						Manufacturing
Index	Series Index Aug	Series Index Jul	Percent Point Change	Direction	Rate of Change	Trend (Months)**	Series Index Aug	Series Index Jul	Percent Point Change
NMI™/PMI™	58.6	56.0	+2.6	Growing	Faster	44	55.7	55.4	+0.3
Business Activity/Production	62.2	60.4	+1.8	Growing	Faster	49	62.4	65.0	-2.6
New Orders	60.5	57.7	+2.8	Growing	Faster	49	63.2	58.3	+4.9
Employment	57.0	53.2	+3.8	Growing	Faster	13	53.3	54.4	-1.1
Supplier Deliveries	54.5	52.5	+2.0	Slowing	Faster	8	52.3	52.1	+0.2
Inventories	56.0	53.5	+2.5	Growing	Faster	7	47.5	47.0	+0.5
Prices	53.4	60.1	-6.7	Increasing	Slower	47	54.0	49.0	+5.0
Backlog of Orders	50.5	46.5	+4.0	Growing	From Contracting	1	46.5	45.0	+1.5
New Export Orders	50.5	49.5	+1.0	Growing	From Contracting	1	55.5	53.5	+2.0
Imports	55.0	50.5	+4.5	Growing	Faster	3	58.0	57.5	+0.5
Inventory Sentiment	63.5	64.0	-0.5	Too High	Slower	195	N/A	N/A	N/A
Customers’ Inventories	N/A	N/A	N/A	N/A	N/A	N/A	42.5	47.5	-5.0

* Non-Manufacturing ISM Report On Business^® data is seasonally adjusted for Business Activity, New Orders, Prices and Employment

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Any securities mentioned on this page are not held by the author in his personal portfolio. Securities mentioned may or may not be held by the author in the mutual fund he manages, the Paladin Long Short Fund (PALFX). For a list of the aforementioned fund’s holdings at the end of the prior quarter, visit the Paladin Funds website at http://www.paladinfunds.com/index.php/the-fund/holdings