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 Declined to 55.2 in March
Posted Under: Data Watch • ISM Non-Manufacturing
Supporting Image for Blog Post


Implications:  Service sector activity grew for an 87th consecutive month in March, though at a slightly slower pace than in recent months.  While March's reading of 55.2 represents the slowest pace of expansion since before the election, it still represents healthy growth from a key sector of the economy.  And the growth remains broad-based, with fifteen of eighteen industries reporting growth. The two most forward looking indices – new orders and business activity – both showed a slower pace of expansion in March, but there is little reason for concern.  The majority of survey respondents indicated a positive outlook for the coming months, and the continued growth in new orders will keep companies busy.  The employment index also declined in March, which comes in contrast to the strong ADP report also out this morning (more on that below) and initial claims reports that continue to trend near historic low levels.  We do expect employment growth will eventually moderate as the labor market tightens, but the tax and regulatory reforms promised by the new administration should provide a tailwind across the service sector.  On the inflation front, the prices paid index declined to 53.5 in March from 57.7 in February, despite more than twenty commodities showing rising prices and just three showing declines.  The service sector continues to grow, manufacturing activity is picking up, and employment and inflation show an economy headed in a positive direction.  In other news this morning, the ADP index says private-sector payrolls increased 263,000 in March, easily beating consensus expectations.  Plugging these data into our payroll models suggests the Labor Department's official report to be released Friday will show a nonfarm payroll gain of about 200,000.  This forecast may change slightly based on tomorrow's report on unemployment claims.  

Click here for PDF version

Posted on Wednesday, April 5, 2017 @ 11:57 AM • 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.