Home Logon FTA Investment Managers Blog Subscribe About Us Contact Us

Search by Ticker, Keyword or CUSIP       

Blog Home
   Brian Wesbury
Chief Economist
X •  LinkedIn
   Bob Stein
Deputy Chief Economist
X •  LinkedIn
  The ISM Non-Manufacturing Index Increased to 53.7 in May
Posted Under: Data Watch • ISM Non-Manufacturing
Supporting Image for Blog Post

Implications: Another piece of data, another Plow Horse report. Today's ISM services report came in at a respectable 53.7, signaling continued moderate growth in the service sector. Nothing in the report is reason to worry or reason to get too excited. The report is the 41st consecutive reading above 50, signaling expansion. The business activity index, – which has a stronger correlation with economic growth than the overall index – rose to a very solid 56.5. The worst news was that the employment index fell to 50.1 from 52.0. This fits in with the slightly weaker numbers that we saw in the ADP employment report earlier today and fits with our forecast of a moderate 153,000 gain in nonfarm payrolls in May. The ISM surveys can sometime reflect the vagaries of business sentiment rather than actual levels of service sector output. Pessimistic analysts have been touting the end of the payroll tax cut and the federal spending sequester as reasons to expect weaker economic growth. But the truth, from looking at the data over the past few months, is little to no significant impact from these events on the consumer or economy and we do not think there will be. We have yet to see any data that pushes us off our forecast that the US economy will grow in the 2.5% to 3% range in 2013. On the inflation front, the prices paid index fell to 51.1. Right now, inflation is not a problem. But monetary policy is very loose and we still expect it to be a gradually growing problem over the next few years.

Click here for a PDF version
Posted on Wednesday, June 5, 2013 @ 12:10 PM • Post Link Print this post Printer Friendly

These posts were prepared by First Trust Advisors L.P., and reflect the current opinion of the authors. They are based upon sources and data believed to be accurate and reliable. Opinions and forward looking statements expressed are subject to change without notice. This information does not constitute a solicitation or an offer to buy or sell any security.
The information presented is not intended to constitute an investment recommendation for, or advice to, any specific person. By providing this information, First Trust is not undertaking to give advice in any fiduciary capacity within the meaning of ERISA, the Internal Revenue Code or any other regulatory framework. Financial professionals are responsible for evaluating investment risks independently and for exercising independent judgment in determining whether investments are appropriate for their clients.
Follow First Trust:  
First Trust Portfolios L.P.  Member SIPC and FINRA. (Form CRS)   •  First Trust Advisors L.P. (Form CRS)
Home |  Important Legal Information |  Privacy Policy |  California Privacy Policy |  Business Continuity Plan |  FINRA BrokerCheck
Copyright © 2024 All rights reserved.