Tuesday, July 6, 2010

ISM Non-Manufacturing Index Down 1.6 Points to 53.8

After staying level at 55.4 points for three consecutive months, the ISM Non-Manufacturing Index fell back 1.6 points in June to 53.8. This was the first decline in the index since last November. However, a value above fifty still indicates service sector activity expansion, so the decline in the value represents a deceleration of growth over the month. The index is in line with other recent indicators for June, including the manufacturing ISM index, that are showing a softening of economic recovery.

The business output component fall back 3.0 points, but remained strong at 58.1. The weaker portion of the index was the employment component, which fell back below the expansionary threshold to 49.7. Also of note is that the new orders component fell to 54.4, its lowest level since last December. This component is indicative of future activity in coming months. If this downward trend continues it would suggest that further steam is coming out of the expansion.

Source: Institute for Supply Management

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