Home   Logon   Mobile Site   Research and Commentary   About Us   Call 1.800.621.1675 or Email Us       Follow Us: 

Search by Ticker, Keyword or CUSIP       
 
 

Blog Home
   Brian Wesbury
Chief Economist
 
Click for Bio
Follow Brian on Twitter Follow Brian on LinkedIn View Videos on YouTube
   Bob Stein
Deputy Chief Economist
Click for Bio
Follow Bob on Twitter Follow Bob on LinkedIn View Videos on YouTube
 
  The ISM Non-Manufacturing Index Fell to 52.9 in May
Posted Under: Data Watch • Employment • Inflation • ISM Non-Manufacturing

 

Implications: Service sector activity continued to grow in May, as fourteen of eighteen industries surveyed by the ISM reported expansion, while just four - including mining and educational services - reported contraction. Yes, the pace of growth slowed from April, but overall activity expanded in the service sector for a 76th consecutive month, and continued strength in both new orders and business activity show positive signs for the months ahead. And while both the new orders and business activities indexes declined in May, both remain comfortably above 50, signaling continued expansion. Taken together, growth prospects remain positive with no sign of a looming recession. In line with this morning's disappointing jobs report, the employment index fell to 49.7 in May, despite eleven of eighteen industries reporting rising employment (six reported reductions). Given the sustained activity in new orders and business activity, we expect the employment index to return to levels above 50 in the months ahead. On the inflation front, the prices paid index rose for a second consecutive month, with rising prices for fuels and paper products more than offsetting declines in prices for beef, eggs, and metals. Rising energy prices have pushed the major inflation indicators higher in recent months, led by the recovery in oil prices. Even if oil prices level out rather than continue the march higher, inflation will approach the Fed's 2% inflation target faster than many market participants are expecting. As a whole, today's ISM report shows a continuation of Plow Horse growth. It's modest growth, but growth nonetheless.

Click here for a PDF version 

Posted on Friday, June 3, 2016 @ 11:30 AM • Post Link Share: 
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 advisors are responsible for evaluating investment risks independently and for exercising independent judgment in determining whether investments are appropriate for their clients.
First Trust Portfolios L.P.  Member SIPC and FINRA.
First Trust Advisors L.P.
Home |  Important Legal Information |  Privacy Policy |  Business Continuity Plan |  FINRA BrokerCheck
Copyright © 2019 All rights reserved.