The ISM Non-manufacturing report for April 2010 is out. The overall index flat lined to 55.4%, exactly the same as last month's 55.4%.
The employment index is below 50, at 49.5% and decreased from last month. New orders also slowed. While still above 50, new orders decreased from last month, by -4.1%, although business activity barely budged, up 0.3%. Below is the graph, normalized to zero to show contraction, on employment from the survey, followed by a graph of new orders.
| ISM NON-MANUFACTURING SURVEY RESULTS AT A GLANCE | ||||||
|---|---|---|---|---|---|---|
| Index | Series Index Apr. |
Series Index Mar. |
Percent Point Change |
Direction | Rate of Change |
Trend |
| NMI/PMI | 55.4 | 55.4 | 0.0 | Growing | Same | 4 |
| Business Activity/Prod. | 60.3 | 60.0 | +0.3 | Growing | Faster | 5 |
| New Orders | 58.2 | 62.3 | -4.1 | Growing | Slower | 8 |
| Employment | 49.5 | 49.8 | -0.3 | Contracting | Faster | 28 |
| Supplier Deliveries | 53.5 | 49.5 | +4.0 | Slowing | From Faster | 1 |
| Inventories | 54.5 | 46.5 | +8.0 | Growing | From Contracting | 1 |
| Prices | 64.7 | 62.9 | +1.8 | Increasing | Faster | 9 |
| Backlog of Orders | 49.5 | 55.5 | -6.0 | Contracting | From Growing | 1 |
| New Export Orders | 57.0 | 57.5 | -0.5 | Growing | Slower | 2 |
| Imports | 56.5 | 51.0 | +5.5 | Growing | Faster | 2 |
| Inventory Sentiment | 53.5 | 52.5 | +1.0 | Too High | Faster | 155 |
This is not a great report frankly. Firstly employment is contracting, secondly the inventory sentiment implies a further inventory reduction. Obviously a -4.1% decline in new orders is not a good sign either. One of the comments from retail said they would experience a slow down if prices continue to rise. Odds are, due to the Gulf oil spill, one thing is guaranteed to rise. Most disconcerting is the next ending employment contraction.
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