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 was Unchanged at 57.2 in December
Posted Under: Data Watch • ISM Non-Manufacturing

 

Implications:  Service sector sentiment matched the highest reading of 2016 in December, showing expansion for an 83rd consecutive month.  While the headline index was unchanged from November's reading of 57.2, the underlying details of the report were an improvement.  New orders jumped to 61.6, the highest reading in more than a year and a sign that business activity (and employment) should follow suit higher in the coming months as companies fill the rise in orders.  Meanwhile, the largest decline in December came from the employment index, which continued to signal job growth, but at a slower pace than in November.  A modest slowdown in the pace of employment gains is to be expected as the labor market tightens, but we expect hiring will continue and push up the pace of wage gains.  On the inflation front, the prices paid index rose to 57.0 in December from 56.3 in November, representing the highest reading in more than two years.  Rising costs for copper and fuels more than offset declining prices for beef and dairy.  Overall, positive sentiment from the service sector in December was broad-based, with twelve of eighteen industries reporting expansion while only three reported contractions.  And taken as a whole, today's report follows the strong manufacturing sector report released by the ISM on Tuesday in showing a healthy economy heading into the new year as businesses and consumers prepare for new political leadership and new policies.  In other news this morning, initial claims for unemployment insurance plummeted 28,000 last week to 235,000.  Continuing claims rose 16,000 to 2.11 million.  Meanwhile, the ADP report showed private payrolls increased 153,000 in December.  Plugging these figures into our models suggests tomorrow's official report from the Labor Department will show a nonfarm gain of 152,000, which we think will be revised up in later months.  In other recent news, automakers reported cars and light trucks were sold at an 18.4 million annual rate in December, up 3.1% from November, up 5.2% from a year ago, and the fastest pace for any month since 2005.  Auto sales hit another new annual record high in 2016, showing plenty of confidence on the part of consumers.

Click here for PDF version

Posted on Thursday, January 5, 2017 @ 11:24 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.