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 59.5 in February
Posted Under: Data Watch • ISM Non-Manufacturing
Supporting Image for Blog Post


Implications:  Service sector activity continued to hum along in February, though at a slightly slower pace than in January.  And while the pace of growth slowed modestly, the breadth of the expansion widened in February, with sixteen of eighteen industries reporting growth (two reported contraction), up from fifteen industries reporting growth in January.  Meanwhile, the most forward looking indices – new orders and business activity – both rose in February.  In fact, the new orders index reading of 64.8 represents the highest reading for the index going back to late 2005.  Paired with the recent tax reform, activity from the service sector looks set to remain robust over at least the coming months.  The supplier deliveries index was once again unchanged in February, but remains elevated from the levels that we saw in mid-2017, before the hurricane season. While there may still be some lingering remnants of storm impacts, this also reflects a pickup in orders and activity due to an accelerating economy.   The prices paid index declined to 61.0 in February but that still signals price increases, with rising prices cited across fuel types and metals.  In total, twenty-three commodities were reported up in price while just three were reported lower.  On the jobs front, the employment index declined to 55.0 from 61.6 in January. Our forecast may change with ADP and initial claims data due out before Friday's jobs report, but we are currently forecasting 222,000 nonfarm jobs added in February.  Recent tariff talk and poor trade policy decisions out of Washington are worrying, but the fundamentals for economic growth remain strong.  In other recent news, automakers reported selling cars and light trucks at a 17.1 million annual rate in February, down 0.5% from January and down 2.2% from a year ago.  Given the unusual strength of auto sales in the last few years, sales this year should continue to lag levels hit in 2016-17 as consumers shift their purchases toward other sectors.

Click here for PDF version

Posted on Monday, March 5, 2018 @ 11:28 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.