The ISM Non-manufacturing report for December 2010 is out. The overall index increased to 57.1%, 2.1 points higher than November's 55.0%. This report is also referred to as the services index, or service sector index.
New orders jumped 5.3 percentage points, business activity is humming, with a 6.5 percentage point increase from last month. Yet, here we are again, the employment index declined 2.2 percentage points. The employment index is at 50.5, which means these same companies which are hopping in activity are barely breaking even when it comes to adding any workers. Below is the table from the ISM services report, edited.
| ISM NON-MANUFACTURING SURVEY RESULTS AT A GLANCE DECEMBER 2010 | ||||||
|---|---|---|---|---|---|---|
| Index | Series Index Dec. |
Series Index Nov. |
Percent Point Change |
Direction | Rate of Change |
Trend** (Months) |
| NMI/PMI | 57.1 | 55.0 | +2.1 | Growing | Faster | 12 |
| Business Activity/Production | 63.5 | 57.0 | +6.5 | Growing | Faster | 13 |
| New Orders | 63.0 | 57.7 | +5.3 | Growing | Faster | 16 |
| Employment | 50.5 | 52.7 | -2.2 | Growing | Slower | 4 |
| Supplier Deliveries | 51.5 | 52.5 | -1.0 | Slowing | Slower | 9 |
| Inventories | 52.5 | 51.5 | +1.0 | Growing | Faster | 2 |
| Prices | 70.0 | 63.2 | +6.8 | Increasing | Faster | 17 |
| Backlog of Orders | 48.5 | 51.5 | -3.0 | Contracting | From Growing | 1 |
| New Export Orders | 56.0 | 59.5 | -3.5 | Growing | Slower | 4 |
| Imports | 51.0 | 54.5 | -3.5 | Growing | Slower | 5 |
| Inventory Sentiment | 61.5 | 60.0 | +1.5 | Too High | Faster | 163 |
Below is the graph for the December non-manufacturing ISM business activity index, which increased to 63.5%.
New orders also jumped to 63%.
Contrast the above with the employment index. Remember anything below 50 means contraction or in the case of workers, firing people. The below graph has been normalized to 50, the ISM inflection point for expansion versus contraction. Yeah, jobs are a flat line.
Prices dramatically increased by 6.8 percentage points to 70%. From the list of commodities that increased in price, reported below, it looks like our old friend oil is affecting businesses.
Airfares; Batteries; Beef; Copper Products; Cotton (2); Cotton Products (4); #1 Diesel Fuel (3); #2 Diesel Fuel (6); Fuel (12); Gasoline (3); Heating Fuel; Liner Bags; Paper (2); Polyester and Polyester Products; Polyethylene Bags; Service Labor; Soy Oil; Steel; Steel Products; Sugar; Transportation Costs; and Waste Management Services.
To read more sub-indices and details see the actual report (although no eye candy from the ISM).
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