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 Rose to 52.7 in November
Posted Under: Data Watch • Government • Inflation • ISM Non-Manufacturing • Markets • Fed Reserve
Supporting Image for Blog Post


Implications:  Still no sign of a recession in the service sector.  Economic activity continued to expand in November with the headline index rising to 52.7, beating the consensus expectation.  On the surface level, fifteen out of eighteen major industries reported growth in November.  When you contrast this with the November ISM report  on the manufacturing sector – where activity has contracted for thirteen consecutive months and only three industries reported growth in November – there has clearly been a divergence in activity, where output has been shifting back toward services following the COVID-era when goods-related activity was artificially boosted.  Looking at the details, comments from survey respondents were chiefly positive, sighting solid activity consistent with previous months. That can be most easily seen in the new orders index, which remained unchanged at a solid 55.5 in November.  Combine that with its forward-looking counterpart – business activity – which increased to 55.1 in November, both categories sit in healthy expansion territory and have remained above 50 every month of the year so far.  Meanwhile, the labor market in the service sector remains very competitive, with the index for employment remaining above 50 for the sixth consecutive month, signaling growth. Comments on employment continue to indicate that a lack of supply, not demand, has been the problem for hiring in the service sector.  Finally, the highest reading out of any of the categories continues to come from the prices index, which ticked down to a still elevated 58.3 in November.  Although this is well below the back-breaking pace from 2021-22 – make no mistake – prices are still rising, and inflation remains a problem in the service sector.  As for the economy, even though services are still expanding, we continue to believe a recession is on the way.  Expect the service sector to weaken next year, as the impact of the recent reductions in the M2 measure of the money supply make their way through the economy.  In other recent news, cars and light trucks were sold at a 15.3 million annual rate in November, down 0.7% from October but up 7.4% from a year ago.

Click here for a PDF version

Posted on Tuesday, December 5, 2023 @ 11:17 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.