The ISM Non-manufacturing report for June 2010 is out. The overall index decreased to 53.8%, lower 0.7 than the the last three months 55.4%. The index is normalized to 50 for the most part. Above 50 means growth, below 50 implies economic contraction.
Employment is in contraction again, after one month of growth. New orders dropped -2.7% from last month. Below is the employment index graph, normalized to zero for the expansion/contraction 50 inflection point, followed by a graph of new orders.
The industries reporting an increase in employment in June — listed in order — are: Real Estate, Rental & Leasing; Arts, Entertainment & Recreation; Retail Trade; Management of Companies & Support Services; Wholesale Trade; Transportation & Warehousing; Health Care & Social Assistance; and Information. The industries reporting a reduction in employment in June — listed in order — are: Other Services; Utilities; Professional, Scientific & Technical Services; Finance & Insurance; Public Administration; Accommodation & Food Services; and Educational Services.
| ISM NON-MANUFACTURING SURVEY RESULTS AT A GLANCE JUNE 2010 | ||||||
|---|---|---|---|---|---|---|
| Index | Series Index June |
Series Index May |
Percent Point Change |
Direction | Rate of Change |
Trend** (Months) |
| NMI/PMI | 53.8 | 55.4 | -1.6 | Growing | Slower | 6 |
| Business Activity/Production | 58.1 | 61.1 | -3.0 | Growing | Slower | 7 |
| New Orders | 54.4 | 57.1 | -2.7 | Growing | Slower | 10 |
| Employment | 49.7 | 50.4 | -0.7 | Contracting | From Growing | 1 |
| Supplier Deliveries | 53.0 | 53.0 | 0.0 | Slowing | Same | 3 |
| Inventories | 58.5 | 62.5 | -4.0 | Growing | Slower | 3 |
| Prices | 53.8 | 60.6 | -6.8 | Increasing | Slower | 11 |
| Backlog of Orders | 55.5 | 56.0 | -0.5 | Growing | Slower | 2 |
| New Export Orders | 48.0 | 53.5 | -5.5 | Contracting | From Growing | 1 |
| Imports | 48.0 | 56.5 | -8.5 | Contracting | From Growing | 1 |
| Inventory Sentiment | 59.0 | 60.5 | -1.5 | Too High | Slower | 157 |
The NMI (Non-Manufacturing Index) registered 53.8 percent in June, 1.6 percentage points lower than the 55.4 percent registered in May, indicating continued growth in the non-manufacturing sector, but at a slightly slower rate. The Non-Manufacturing Business Activity Index decreased 3 percentage points to 58.1 percent, reflecting growth for the seventh consecutive month. The New Orders Index decreased 2.7 percentage points to 54.4 percent, and the Employment Index decreased 0.7 percentage point to 49.7 percent, reflecting contraction after one month of growth. The Prices Index decreased 6.8 percentage points to 53.8 percent in June, indicating that prices are still increasing but at a slower rate than in May. According to the NMI, 15 non-manufacturing industries reported growth in June. Respondents' comments are mostly positive about business conditions; however, there is concern about the effect of employment on the economic recovery.
If you notice employment is mentioned repeatedly as a reason for the slow down in growth. See the post, The Great Double Dip Recession for some graphs showing how unemployment feeds into itself, reduces demand and slows the economy.
Thank you St. Louis Fed!
Folks, you are probably aware I utilize the Saint Louis Federal Reserve FRED® database. This has to be the absolute best and fastest economic graphing system out there and that includes Excel 2007, which I also use.
Once again, they came to the rescue and updated the database to make these graphs relevant.
It seriously rocks and if they weren't around, graphing will be much slower, I'd have to build up a database of graphs locally, painstakingly put all of the formatting, titles, data points into a spreadsheet or deal with major code bugs for other types of graphing software. Same deal with Matlab.
I'm an eye-candy type of person and I believe there are others like myself who want to see a fast picture of the data. EP was just listed as one of the top blogs for visual presentation of economic events and we owe that to the St. Louis Fed. in large part. They deserve a webby minimum, this is the most wonderful tool.